SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2003
Woori Finance Holdings Co., Ltd.
(Translation of registrant’s name into English)
203, Hoehyon-dong, 1-ga, Chung-gu, Seoul, Korea
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes ¨ No x
Summary of 2003 3rd Quarter Business Report
Table of Contents
| I. | Company Overview |
| 1. | Purpose of Company |
| a. | Scope of Business |
| b. | Scope of Business for Subsidiaries |
| 2. | History of the Company |
| a. | Company History |
| b. | Associated Business Group |
| 3. | Capital Structure |
| a. | Change in Capital |
| b. | Expected Change in Capital |
| c. | Convertible Bonds |
| 4. | Total Number of Authorized Shares |
| a. | Total Number of Authorized Shares |
| b. | Information on Issued Shares |
| c. | Stock Options |
| d. | Status of Employee Stock Union Status |
| 5. | Voting Rights |
| 6. | Dividend Information |
| a. | Dividend Information for the Past Years |
II. Description of Business
| 1. | Business Overview |
| a. | Current Trend of Industry |
| b. | Company Status |
| 2. | Overview of Operations |
| a. | Performance of Operations |
| b. | Financing and Performance of Operations |
| c. | Transactions of Commission Fees |
| 3. | Other Details Relevant to Investment Decision |
| a. | Current Ratio |
| b. | Debt Ratio |
| c. | Credit Rations |
| d. | Other Information |
III. Financial Information
| 1. | Summarized Financial Statements |
1
IV. Independent Auditor’s Opinion
| 1. | Independent Auditor’s Opinion |
| a. | Independent Auditor |
| 2. | Compensation to the Independent Auditor |
| a. | Auditing Service |
| b. | Service other than Audit |
V. Corporate Governance and Related Companies
| 1. | Overview of Corporate Governance |
| a. | About the Board of Directors |
| 2. | Related Companies |
| a. | Invested Shares in Related Companies |
| b. | Year-end Performance of Affiliated companies and Subsidiaries |
| 3. | Investments in Related Companies |
VI. Stock Information
| 1. | Stock Distribution |
| a. | Stock Information of Major Shareholders and Related Parties |
| b. | Share Ownership of more than 5% |
| c. | Shareholder Distribution |
| d. | Total Minority Shareholders, Major Shareholders, and Other Shareholders |
| 2. | Stock Price and Stock Market Performance for the Past 6 Months |
| a. | Domestic Stock Market |
| b. | Foreign Stock Market |
VII. Directors and Employee Information
| 1. | Directors |
| 2. | Employee Status |
VIII. Related Party Transactions
| 1. | Transactions with Major Shareholders |
| a. | Transactions of Provisional Payments and Loans |
| b. | Payment Transactions |
| c. | Real-Estate Transactions |
2
| I. | Company Overview |
| 1. | Purpose of Company |
| a. | Scope of Business |
| 1) | Acquisition/ownership of shares in companies, which are engaged in financial services or are closely related to financial services, and the governance and/or management |
| 2) | Funding of Affiliates (in this provision and hereafter, includes subsidiaries, and subsidiaries of the subsidiaries) |
| 3) | Capital investment in subsidiaries or procurement of funds for funding of Affiliates |
| 4) | Development and sale of products jointly with Affiliates and administrative support for joint use of facilities and computer systems with Affiliates |
| 5) | Development and sale of products jointly with Affiliates and administrative support for joint use of facilities and computer systems with Affiliates |
| 6) | Activities ancillary to the activities in the above items, for which the authorization, permits or approval is not required under the relevant laws and regulations |
| 7) | All businesses or activities directly or indirectly relating to the businesses listed above |
| b. | Scope of Business for Subsidiaries |
| (1) | Woori Bank |
| 1) | Primary Businesses |
| • | Deposit & savings and issuance of securities and other debt obligations |
| • | Loans and bill discounts |
| • | Domestic/overseas related foreign exchange services |
| • | Trust business |
| 2) | Supplementary Businesses |
| • | Loan guarantees, bill undertaking |
| • | Installment services |
| • | Loan and sales of investment securities |
| • | Lending and offering of securities; |
Offering of securities is restricted to commercial paper & trade bills
| • | Underwriting and offering of securities, mediating sales; trading treasury securities under the Act of Securities |
| • | Trading repurchase bonds |
| • | Brokering of treasury bonds, sale of beneficiary certificates |
| • | Factoring |
| • | Safeguard deposits |
| • | Collection and payment services |
| • | Regional and municipal agency deposits |
| • | M&A brokering |
| • | Credit information services, and consulting services |
| • | Fiscal stamp, lottery tickets, and gift certificate sales |
| • | Real estate easing services |
| • | Investments in futures and foreign futures |
3
| (2) | Kyongnam Bank |
| 1) | Banking services and all other related services in accordance with the Banking Act |
| 2) | All trust services in accordance with the Trust Act |
| 3) | All businesses or activities directly or indirectly relating to the businesses listed above |
| (3) | Kwangju Bank |
| 1) | Banking services in accordance with the Banking Act |
| 2) | Foreign exchange services |
| 3) | All trust services in accordance with the Trust Act |
| 4) | All businesses or activities directly or indirectly relating to the businesses listed above |
| (4) | Woori Credit Card |
| 1) | Issuing and managing credit cards |
| 2) | Credit card usage billing and settlement |
| 3) | Registering and managing of merchants |
| 4) | Providing funds to credit card users |
| 5) | All businesses or activities directly or indirectly relating to the businesses listed above. |
| 6) | Providing funds for payments made in installments or deferred payments. |
| 7) | Undertaking, managing, and collecting account receivables of manufacturers or sellers |
| 8) | Leasing services |
| 9) | Credit loans and/or collateralized loans |
| 10) | Discounting of bills |
| 11) | Credit research services relating to businesses 1~7 as mentioned above. |
| 12) | Acquisition of securities issued and/or held by non-bank financial institutions, which are related to businesses 1~11 as mentioned above |
| 13) | Payment guarantees |
| 14) | Bond issuance and debt financing |
| 15) | Foreign currency borrowing and issue of foreign currency securities |
| 16) | Acquiring and managing securities |
| 17) | Telemarketing, Insurance brokering, travel related services |
| 18) | Foreign exchange services |
| 19) | Credit card manufacturing |
| 20) | Organizing and managing associations on behalf of customers |
| 21) | Publishing of service-related publications |
| 22) | Issuing prepaid & debit cards |
| 23) | Prepaid & debit card billing and settlement |
| 24) | Services related to other credit related products |
| 25) | New technology and venture investment |
| 26) | Venture capital |
| 27) | e-Commerce |
| 28) | Real estate leasing |
| 29) | Utilization of Internet for all above services |
| 30) | Supplementary and investment related to all services mentioned above |
| 31) | Services have completed necessary filing, registration, endorsement, and approval from respective government agencies |
4
| (5) | Woori Investment Trust Management |
| 1) | Securities investment trust management |
| 2) | Investment advisory, investment transactions |
| 3) | Futures investment |
| 4) | Call transactions |
| 5) | Purchasing bills |
| 6) | All businesses or activities directly or indirectly relating to businesses 1 to 5 mentioned above |
| (6) | Woori Finance Information System |
| 1) | Development, distribution, and management of computer systems |
| 2) | Consulting services in computer implementation and usage |
| 3) | Distribution, mediation, and lease of computer systems |
| 4) | Maintenance of computer related equipment |
| 5) | Publish and distribute IT related reports and books |
| 6) | Educational services related to computer usage |
| 7) | Information communication, telecommunications, and information distribution services |
| 8) | Manufacturing and distribution of audio-visual media |
| 9) | Information processing and outsourcing services |
| 10) | All businesses or activities directly or indirectly relating to the businesses listed above |
| (7) | Woori F&I |
| 1) | Undertaking and disposition of ABS, issued primarily to securitize distressed assets through asset securitization, under the Asset Securitization Law |
| 2) | Undertaking and disposition of asset management companies that were initially set up to manage distressed assets, under the Asset securitization Law. |
| 3) | All businesses or activities directly or indirectly relating to the businesses listed above |
| (8) | Woori LB First Asset Securitization Specialty Co., Ltd. |
| 1) | Transfer, management, and disposition of all rights related to securities and other assets (hereafter ‘securitized assets’) from Hanvit Bank, Peace Bank, Kyongnam Bank, Kwangju Bank, and Woori Merchant Bank under the Asset Securitization Law. |
| 2) | Issue and redemption of securitized assets |
| 3) | Preparing and registering of asset securitization plan to the Financial Supervisory Service |
| 4) | Consummation of contracts required to execute the asset securitization plan |
| 5) | Provisional borrowing and other similar procedures for ABS redemption. |
| 6) | Investment of surplus funds |
| 7) | Other businesses and activities relating to the businesses listed above. |
5
| (9) | Woori LB Second Asset Securitization Specialty Co., Ltd. |
| 1) | Transfer, management, and disposition of all rights related to securities and other assets (hereafter ‘securitized assets’) Hanvit Bank and Kwangju Bank under the Asset Securitization Law.. |
| 2) | Issue and redemption of securitized assets |
| 3) | Preparing and registering of asset securitization plan to the Financial Supervisory Service |
| 4) | Consummation of contracts required to execute the asset securitization plan |
| 5) | Provisional borrowing and other similar procedures for ABS redemption. |
| 6) | Investment of surplus funds |
| 7) | Other businesses and activities relating to the businesses listed above. |
| (10) | Woori LB Third Asset Securitization Specialty Co., Ltd. |
| 1) | Transfer, management, and disposition of all rights related to securities and other assets (hereafter ‘securitized assets’) from Hanvit Bank, Kyongnam Bank and Woori Credit Card under the Asset Securitization Law. |
| 2) | Issue and redemption of securitized assets |
| 3) | Preparing and registering of asset securitization plan to the Financial Supervisory Service |
| 4) | Consummation of contracts required to execute the asset securitization plan |
| 5) | Provisional borrowing and other similar procedures for ABS redemption. |
| 6) | Investment of surplus funds |
| 7) | Other businesses and activities relating to the businesses listed above |
6
| (11) | Woori Securities |
| 1) | Securities dealing |
| 2) | Sale consignment of securities |
| 3) | Brokering of securities transactions and/or proxy transactions |
| 4) | Brokering of securities in domestic securities markets and overseas markets |
| 5) | Underwriting securities |
| 6) | Offering of securities |
| 7) | Conscription for securities sales |
| 8) | Securities saving services |
| 9) | Overseas securities trading |
| 10) | Credit services related to securities trading |
| 11) | Lending and safe services |
| 12) | Trading and brokering of marketable certificate of deposits |
| 13) | Agent services for foreigners |
| 14) | Payment guarantee for corporate bond principal and interest |
| 15) | Trustee services for bond offerings |
| 16) | M&A mediation and brokering |
| 17) | Public offering related deposit agent services |
| 18) | Foreign exchange services |
| 19) | Bill discounting and trading |
| 20) | Bill brokering |
| 21) | Real estate leasing |
| 22) | Lending of securities to institutional investors |
| 23) | Lottery and ticket sales |
| 24) | Publishing books and other publications |
| 25) | Leasing and sales of IT systems and software related to securities |
| 26) | Customer investment funds foreign exchange and foreign currency hedging |
| 27) | Financial derivatives |
| 28) | Consignment sales of mutual funds |
| 29) | Futures and consulting services under the Securities & exchange law |
| 30) | Other businesses and activities relating to the businesses listed above. |
7
| 2. | History of the Company |
| a. | Company History |
| (1) | Background to establishment and major changes |
| December 23, 2000 |
Establishment of Financial Holding Company Act | |
| December 30, 2000 |
KDIC invested public fund of 8541.6 billion dollars in Hanvit Bank, Peace Bank, Kwangju Bank, Kyongnam Bank, and Hanaro Merchant Bank | |
| March 14, 2001 |
Filed permission for establishment of ‘Woori Finance Holdings’ | |
| March 24, 2001 |
Official permission from FSS for ‘Woori Finance Holdings’ | |
| March 27, 2001 |
Incorporated as ‘Woori Finance Holdings, Co. Ltd’ (Total Capital | |
| April 2, 2001 |
Official launch of ‘Woori Finance Holdings’ | |
| July 16, 2001 |
Issued bond with warrants | |
| September 29, 2001 |
Woori Finance Information System incorporated as subsidiary | |
| December 3, 2001 |
Woori Asset Management incorporated as subsidiary | |
| December 3, 2001 |
Woori First SPC incorporated as subsidiary | |
| December 26, 2001 |
Woori Second SPC incorporated as subsidiary | |
| December 31, 2001 |
Split merger of Peace Bank; Launch of Woori Credit Card | |
| March 15, 2002 |
Establishment of Woori Third SPC subsidiary | |
| March 29, 2002 |
Woori Investment Trust Management incorporated as subsidiary | |
| June 11, 2002 |
Capital increase through public offering (Total capital : 3.817 trillion won) | |
| June 24, 2002 |
Listed on the Korea Stock Exchange | |
| July 29, 2002 |
Woori Securities as incorporated as subsidiary | |
| September 5, 2002 |
Consummated strategic investment agreement of up to billion dollars with Lehman Brothers, in managing distressed assets | |
| December 23, 2002 |
P&A contract with credit card division of Kwangju Bank | |
| December 31, 2002 |
IT outsourcing contract with Kwangju Bank and Kyongnam Bank | |
| March 10, 2003 |
Integrated IT platform with Kyongnam Bank | |
| August 1, 2003 |
Woori Merchant Bank merged into Woori Bank | |
8
| b. | Associated Business Group |
| (1) | Overview of Business Group |
| 1) | Name of business group : Woori Finance Group |
| 2) | History |
| December 23, 2000 |
Establishment of Financial Holding Company Act | |
| December 30, 2000 |
KDIC invested public fund of 8541.6 billion dollars in Hanvit Bank, Peace Bank, Kwangju Bank, Kyongnam Bank, and Hanaro Merchant Bank | |
| March 14, 2001 |
Filed permission for establishment of ‘Woori Finance Holdings’ | |
| March 24, 2001 |
Official permission from FSS for ‘Woori Finance Holdings’ | |
| March 27, 2001 |
Incorporated as ‘Woori Finance Holdings, Co. Ltd’ (Total Capital | |
| April 2, 2001 |
Official launch of ‘Woori Finance Holdings’ | |
| July 16, 2001 |
Issued bond with warrants | |
| September 29, 2001 |
Woori Finance Information System incorporated as subsidiary | |
| December 3, 2001 |
Woori Asset Management incorporated as subsidiary | |
| December 3, 2001 |
Woori First SPC incorporated as subsidiary | |
| December 26, 2001 |
Woori Second SPC incorporated as subsidiary | |
| December 31, 2001 |
Split merger of Peace Bank; Launch of Woori Credit Card | |
| March 15, 2002 |
Establishment of Woori Third SPC subsidiary | |
| March 29, 2002 |
Woori Investment Trust Management incorporated as subsidiary | |
| June 11, 2002 |
Capital increase through public offering (Total capital : 3.817 trillion won) | |
| June 24, 2002 |
Listed on the Korea Stock Exchange | |
| July 29, 2002 |
Woori Securities as incorporated as subsidiary | |
| September 5, 2002 |
Consummated strategic investment agreement of up to billion dollars with Lehman Brothers, in managing distressed assets | |
| December 23, 2002 |
P&A contract with credit card division of Kwangju Bank | |
| December 31, 2002 |
IT outsourcing contract with Kwangju Bank and Kyongnam Bank | |
| March 10, 2003 |
Integrated IT platform with Kyongnam Bank | |
| August 1, 2003 |
Woori Merchant Bank merged into Woori Bank | |
9
| (2) | Related companies within Business Group |
| Type | Name of Company | Controlling company | Notes | |||
| Holding Company |
Woori Finance Holdings |
KDIC |
||||
| 1st Tier Subsidiaries |
Woori Bank, Co. |
Woori Finance
Holdings |
11 companies | |||
| Kyongnam Bank, Co. |
||||||
| Kwangju Bank, Co. |
||||||
| Woori Credit Card, Co. |
||||||
| Woori Finance Information System |
||||||
| Woori F & I |
||||||
| Woori First SPC |
||||||
| Woori Second SPC |
||||||
| Woori Third SPC |
||||||
| Woori Investment Trust Management, Co. |
||||||
| Woori Securities, Co. (*1) |
||||||
| 2nd Tier Subsidiaries |
Woori Credit Information, Co. |
Woori Bank |
6 companies | |||
| Woori America Bank |
||||||
| P.T. Bank Woori Indonesia |
||||||
| Shinwoo Corporate Restructuring Company |
||||||
| Nexbi Tech |
Woori Credit Card |
|||||
| Woori CA Asset Management |
Woori F&A |
|||||
| (*1) | Listed Company |
10
| 3. | Capital Structure |
| a. | Change in Capital |
(units: won)
| Stock Decrease/Increase | ||||||||||||||||
| Date | Category | Type | Quantity | Par Value | Issue price |
Changed Capital |
Method | Ratio | ||||||||
| 2001.3.27 |
Establishment | C/S | 727,458,609 | 5,000 | 5,000 | 3,637,293,045 | — | — | ||||||||
| 2002.5.31 |
Exercise BW | C/S | 165,782 | 5,000 | 5,000 | 3,638,121,955 | — | — | ||||||||
| 2002.6.12 |
Capital increase w/consideration | C/S | 36,000,000 | 5,000 | 6,800 | 3,818,121,955 | Public Offering |
0.0494 | ||||||||
| 2002.6.30 |
Exercise BW | C/S | 1,416,457 | 5,000 | 5,000 | 3,825,204,240 | — | — | ||||||||
| 2002.9.30 |
Exercise BW | C/S | 2,769,413 | 5,000 | 5,000 | 3,839,051,305 | — | — | ||||||||
| 2002.12.31 |
Exercise BW | C/S | 4,536 | 5,000 | 5,000 | 3,839,073,985 | — | — | ||||||||
| 2003.3.31 |
Exercise BW | C/S | 1,122 | 5,000 | 5,000 | 3,839,079,595 | — | — | ||||||||
| 2003.6.30 |
Exercise BW | C/S | 7,688,991 | 5,000 | 5,000 | 3,877,524,550 | — | — | ||||||||
| b. | Expected Change in Capital |
Unwarranted foreign convertible bonds can be converted a year after its issuance, and therefore can bring about change in capital.
| (1) | Unsecured Convertible Bond Series No. 6-1 |
| Item | Information | |
| Date of Issuance |
2002.9.27 | |
| Total Amount of Issuance |
USD 36,000,000 | |
| Exercise Period |
2003.9.28 ~ 2005.08.27 | |
| Exercise Price |
7,313 won | |
| Total amount of unexercised bond with warrants |
USD 36,000,000 | |
| Number of Shares |
5,914,180 | |
11
| (2) | Unsecured Convertible Bond Series No. 6-2 |
| Item | Information | |
| Date of Issuance |
2002.12.20 | |
| Total Amount of Issuance |
USD 16,000,000 | |
| Exercise Period |
2003.12.21 ~ 2005.11.20 | |
| Exercise Price |
5,588 won | |
| Total amount of unexercised bond with warrants |
USD 16,000,000 | |
| Number of Shares available for issuance |
3,481,173 | |
| (3) | Unsecured Convertible Bond Series No. 6-3 |
| Item | Information | |
| Date of Issuance |
2003.3.26 | |
| Total Amount of Issuance |
USD 39,000,000 | |
| Exercise Period |
2004. 3.27 ~ 2006. 2.26 | |
| Exercise Price |
5,380 won | |
| Total amount of unexercised bond with warrants |
USD 39,000,000 | |
| Number of Shares available for issuance |
8,661,914 | |
| (4) | Unsecured Convertible Bond Series No. 6-4 |
| Item | Information | |
| Date of Issuance |
2003.3.26 | |
| Total Amount of Issuance |
20 billion won | |
| Exercise Period |
2004. 3.27 ~ 2006. 2.26 | |
| Exercise Price |
5,380 won | |
| Total amount of unexercised bond with warrants |
20 billion won | |
| Number of Shares available for issuance |
3,717,472 | |
12
| 5) | Unsecured Convertible Bond Series No. 6-5 |
| Item | Information | |
| Date of Issuance |
2003.7.10 | |
| Total Amount of Issuance |
USD 1,000,000 | |
| Exercise Period |
2004. 7.11 ~ 2006.6.10 | |
| Exercise Price |
7,228 won | |
| Total amount of unexercised bond with warrants |
USD 1,000,000 | |
| Number of Shares available for issuance |
164,429 | |
| c. | Convertible Bonds |
(units: won, shares)
| Item | Unsecured C/B Series 6-1 |
Unsecured C/B Series 6-1 |
Unsecured C/B Series 6-1 |
Unsecured C/B Series 6-1 |
Unsecured C/B Series 6-1 |
Total | ||||||||
| Date of Issue |
2002.9.27 | 2002.12.20 | 2003.3.26 | 2003.3.26__ | 2003.7.10 | — | ||||||||
| Total Amount |
36,000,000 | 16,000,000 | 39,000,000 | 20 billion | 1,000,000 | USD92,000,000 +20 billion | ||||||||
| Allotment Method |
Private | Private | Private | Private | Private | — | ||||||||
| Conversion Period |
2003.9.28~ 2005.8.27 |
2003.12.21 ~ 2005.11.20 |
2004.3.27 ~ 2006.2.26 |
2004.3.27 ~ 2006.2.26 |
2004. 7.11 ~ 2006. 6.10 |
— | ||||||||
| Conditions |
ratio | 100% | 100% | 100% | 100% | 100% | — | |||||||
| price | 7,313 | 5,588 | 5,380 | 5,380 | 7,228 | — | ||||||||
| Type of Stock when converted |
Common | Common | Common | Common | Common | — | ||||||||
| Converted Bonds |
amount | — | — | — | — | — | — | |||||||
| shares | — | — | — | — | — | — | ||||||||
| Unconverted Stock |
amount | 36,000,000 | 16,000,000 | 39,000,000 | 200__ | 1,000,000 | — | |||||||
| shares | 5,914,180 | 3,481,173 | 8,661,914 | 3,717,472 | 164,429 | 21,939,168 | ||||||||
| Notes |
Maturity: 2005.9.27 |
Maturity: 2005.12.20 |
Maturity: 2006.3.26 |
Maturity : 2006.3.26 |
Maturity : 2006.7.10 |
— | ||||||||
| * | Units in won. |
| Series 6-1, 6-2, 6-3, 6-5 issuances are in dollars, while session 6-4 is in won |
| Conversion value is stated in won; the currency rate used in Series 6-1 was 1,210 won/$, 6-2 was 1,215.80 won/$, 6-3 was 1,194.90won/$, and 6-5 was 1,188.50won/$ respectively. |
13
| 4. | Total Number of Authorized Shares |
| a. | Total Number of Authorized Shares |
(as of 2003.09.30)
| Total Number of shares to be authorized | Total Number of Issued Stock | Total Number of Unissued Stock | ||
| 2,400,000,000 |
775,504,910 | 1,624,495,090 | ||
| b. | Information on Issued Shares |
(as of 2003.09.30)
| (Par Value : 5000 won) |
(units: 1000 won, shares) |
| Type | Number of Stock Issued |
Face Value | Notes | |||||
| Registered |
Common Stock | 775,504,910 | 3,877,524,550 | |||||
| Total |
775,504,910 | 3,877,524,550 | ||||||
14
| c. | Stock Options |
| (as of 2003.09.30) |
(units: won, shares) |
| Grant date | Relationship | Grantee | Type of stock |
No. of granted options |
Exercised options |
Exercisable options |
Exercise period |
Exercise price | ||||||||
| 2002.12.04 |
Standing director | Byung Chul Yoon | Common | 100 | 100 | 2005.12.4 ~2008.12.3 |
||||||||||
| 2002.12.04 |
Standing director | Kwang Woo Chun |
Common | 80 | — | 80 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Standing director | Euoo Sung Min |
Common | 80 | — | 80 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Non-standing dir. | Hwan Kyu Park |
Common | 40 | — | 40 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Non-standing dir. | Ki Chul Han | Common | 30 | — | 30 | 2005.12.4 | — | ||||||||
| 2002.12.04 |
Non-standing dir. | Tae Ho Sohn |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Non-standing dir. | Won Gihl Son |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Non-standing dir. | Nam Hong Cho |
Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Standing director | Sang Chul Lee |
Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Standing director | Chae Woong Lee |
Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Standing director | Gae Min Lee |
Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
— | Kwang Sun Chung |
Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Standing director | Hae-Suk Suh |
Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Standing director | Duk Hoon Lee |
Common | 80 | — | 80 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Dir .of related company | Jong Wook Kiim |
Common | 45 | — | 45 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Jin Kyu Park |
Common | 45 | — | 45 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Jong Ku Min |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Jong Hwee Lee |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Dong Myun Suh |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Ki Shin Kim |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Young Seok Kim |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Byung Kil Choi |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Young Ho Park |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
15
| Grant date | Relationship | Grantee | Type of stock |
No. of granted options |
Exercised options |
Exercisable options |
Exercise period |
Exercise price | ||||||||
| 2002.12.04 |
Director of related company | Tae Woong Chung |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Dong Chan Bae |
Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Dae Hwan Kim |
Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Young Ha Kim |
Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Young Yong Kim |
Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Taik Su Han | Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Sang Im Park | Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Joon Ho Hahm | Common | 10 | — | 10 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Joon Ho Lee | Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Joo Sun Ohm | Common | 20 | — | 20 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Ga Seok Chae | Common | 20 | — | 20 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Sung Wook Park |
Common | 5 | — | 5 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Ki Seok Kim |
Common | 5 | — | 5 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Jae Ki Hong | Common | 5 | — | 5 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Sam Su Hong |
Common | 40 | — | 40 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
— | Jung Rak Chun | Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Won Chul Hwang | Common | 20 | — | 20 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Jong Hwee Kim | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
— | Sung Hoo Kwak | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Seok Hwan Lee | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Seok Hee Hwang | Common | 40 | — | 40 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Choong Hwan Lee | Common | 35 | — | 35 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Ki Sang Chung | Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Ki Joong Kim | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Kwang Seo Koo | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
16
| Grant date | Relationship | Grantee | Type of stock |
No. of granted options |
Exercised options |
Exercisable options |
Exercise period |
Exercise price | ||||||||
| 2002.12.04 |
— | In Ki Paik | Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Seung Yang Park | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Keun Soo Yook | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Ki Jong Chung | Common | 5 | — | 5 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Hun Il Nam | Common | 30 | — | 30 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Young Soo Kim | Common | 30 | — | 30 | 2005.12.4 ~2008.12.33 |
— | ||||||||
| 2002.12.04 |
Director of related company | Jin Ho Yoo | Common | 20 | — | 20 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Seok Koo Yoon | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Ji Yeon Joo | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Ho Hyun Lee | Common | 20 | — | 20 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Chan Kook Chung | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Duk Yoon Kim | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Young Wook Kim | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| 2002.12.04 |
Director of related company | Dae Kyu Ko | Common | 15 | — | 15 | 2005.12.4 ~2008.12.3 |
— | ||||||||
| Total |
— | — | — | 1,560 | — | 1,560 | — | — | ||||||||
17
| d. | Status of Employee Stock Union Status |
| (as of 2003.9.30) |
(units: won, shares) |
| Type of stock | Initial Balance |
Increase | Decrease | Ending Balance |
Notes | |||||
| Common stock |
15,439,230 | — | 11,570,183 | 3,689,047 | ||||||
| Total |
15,439,230 | — | 11,570,183 | 3,689,047 | ||||||
| 5. | Voting Rights |
| (as of 2002.12.31) |
(units: shares) |
| Items | Number of stock |
Notes | ||
| 1. Stock with voting rights (A-B) |
(767,814,767) | |||
| A. Total Number of issued stocks |
767,814,767 | |||
| B. Stocks without voting rights |
— | |||
| 2. Stocks with limited voting rights (A+B+C+D) |
(—) | |||
| A. Limited by the Business Law |
— | |||
| B. Limited by the Securities & Exchange Law |
— | |||
| C. Restrictions due to monopoly regulations and Fair Trade Act |
— | |||
| D. Limited by other law enforcements |
— | |||
| 3. Stocks with voting rights restored |
(—) | |||
| Stocks with Voting Rights (1-2+3) |
(767,814,767) | |||
18
| 6. | Dividend Information |
| a. | Dividend information for the past years |
| (Par value : 5000 won) |
(units: won) |
| Items | 2002 | 2001 | ||||||||||
| Net profit |
589,214,226,635 | 684,102,036,323 | ||||||||||
| Earnings per share (won) |
786 | 940 | ||||||||||
| Profit available for Dividend distribution |
1,086,596,253,235 | 558,501,102,453 | ||||||||||
| Propensity to Dividend |
||||||||||||
| D I V I D E N D S |
C A S H
P A Y O U T |
A. Dividend Per Stock |
large | C/S | 50 | |||||||
| P/S | ||||||||||||
| small | C/S | 250 | ||||||||||
| P/S | ||||||||||||
| B. Total Dividend Amount |
large | C/S | 33,672,930,450 | |||||||||
| P/S | ||||||||||||
| small | C/S | 23,589,047,000 | ||||||||||
| P/S | ||||||||||||
| C. Dividend Ratio |
large | C/S | 1.04 | |||||||||
| P/S | ||||||||||||
| small | C/S | 5.22 | ||||||||||
| P/S | ||||||||||||
| S T O C K |
A. Stock Dividend Ratio |
large | C/S | |||||||||
| P/S | ||||||||||||
| small | C/S | |||||||||||
| P/S | ||||||||||||
| B. Stock Dividend Per Share |
large | C/S | ||||||||||
| P/S | ||||||||||||
| small | C/S | |||||||||||
| P/S | ||||||||||||
| Net Asset per Share |
6,596 | 5,605 | ||||||||||
| Ordinary Income per Share |
786 | 943 | ||||||||||
19
| II. | Description of Business |
| 1. | Business Overview |
| a. | Current Trend of Industry |
| * | Further Expansion and Convergence |
| • | Introduction of more diverse and complex financial securities, especially in the Bancassurance business |
| * | Expansion in business roles of financial institutions, and increasing competition due to developments in IT and capital markets |
| • | No longer dependent on deposit to loan margin, now seeking new revenue models |
| • | IT developments inducing communications industry to enter the market |
| * | Market share competition in retail finance markets |
| • | Aggressive competition due to rapid growth in retail financial markets, such as the credit card business. |
| b. | Company Status |
| (1) | General Overview and Classification of Business Sectors |
| (a) | General Overview |
Woori Finance Holdings Co., Ltd. (the “Company”) was established on March 27, 2001. The Company was engaged in the business of managing the five financial institutions (Woori Bank (formerly Hanvit Bank), Kyongnam Bank, Kwangju Bank, Woori Credit Card Co., Ltd. (formerly Peace Bank of Korea) and Woori Investment Bank (hereafter the “five subsidiaries”), whose shares were contributed to the Company by the Korea Deposit Insurance Corporation (the “KDIC”) in accordance with the provisions of the Financial Holding Company Act. In accordance with its functional restructuring, the Company established or acquired seven more subsidiaries, and has four 2nd -tier subsidiaries. On establishment, the Company’s common stock amounted to (Won)3,637,293 million ($3,030,067 thousand), consisting of 727,459,000 common shares ((Won)5,000 per share) issued and outstanding. However as a result of several capital increases since establishment, the Company’s common stock amounted to (Won)3, 839,074 million ($3,198,162 thousand), consisting of 767,814,797 common shares issued and outstanding as of December 31, 2002. On June 24, 2002, the Company listed its common shares on the Korea Stock Exchange through a public offering at a price of (Won)6,800 per share, which included 36 million new shares and 54 million issued shares. The KDIC owned 673,458,609 (87.7%) shares of the Company’s common shares as of December 31, 2002.
Woori Bank (formerly Hanvit Bank) was established in 1899 and is engaged in the commercial banking business under the Korean Banking Law, trust business under the Trust Business Law, and foreign exchange business with approval from the Bank of Korea (“BOK”) and the Ministry of Finance and Economy (“MOFE”). In connection with the infusion of public funds, Woori Bank and the KDIC have entered into an Agreement on the Implementation of the Business Plan. Woori Bank changed its name from Hanvit Bank to Woori Bank on May 20, 2002. Its common stock amounted to (Won)2,764,400 million ($2,302,899 thousand) consisting of 552,880,000 common shares issued and outstanding as of December 31, 2002. Woori Bank is wholly owned by the Company. The head office of Woori Bank is located in Seoul, Korea. Woori Bank has 675 branches or offices in Korea and overseas.
20
Kyongnam Bank was incorporated on April 18, 1970 and is engaged in the commercial banking business under the Korean Banking Law, trust business under the Trust Business Law, and foreign exchange business with approval from the BOK and the MOFE. In connection with the infusion of public funds, Kyongnam Bank and the KDIC have entered into an Agreement on the Implementation of the Business Plan. As of December 31, 2002, Kyongnam Bank’s common stock amounted to (Won)259,000 million ($215,761 thousand) consisting of 51,800,043 shares of common stock issued and outstanding. The Company owns 99.99% of Kyongnam Bank. The head office of Kyongnam Bank is located in Masan, Korea. Kyongnam Bank has 127 branches or offices in Korea.
Kwangju Bank was established on October 7, 1968 and is engaged in the commercial banking business under the Korean Banking Law, trust business under the Trust Business Law, and foreign exchange business with approval from the BOK and the MOFE. In connection with the infusion of public funds, Kwangju Bank and KDIC have entered into an Agreement on the Implementation of the Business Plan. As of December 31, 2002, its common stock amounted to (Won)170,403 million ($141,955 thousand) consisting of 34,080,517 common shares issued and outstanding. The Company owns 99.99% of Kwangju Bank. Its head office is located in Kwangju City, Korea. Kwangju Bank has 112 domestic branches or offices in Korea.
Woori Credit Card Co., Ltd. (“WCC”, formerly Peace Bank of Korea) was established on November 6, 1991 to engage in the commercial banking business under the Korean Banking Law, trust business under the Trust Business Law, and foreign exchange business with approval from the BOK and the MOFE. On December 17, 2001, WCC changed its name from Peace Bank of Korea to Woori Credit Card Co., Ltd. and is engaged in the credit card business, factoring and other financing services. Pursuant to the business transfer agreement entered into between Woori Bank and WCC dated December 26, 2001, the banking business segment (including trust accounts) of WCC was merged with Woori Bank as of December 31, 2001. WCC acquired the credit card subscriber base of Woori Bank on January 31, 2002. In connection with the infusion of public funds, WCC and the KDIC have entered into an Agreement on the Implementation of the Business Plan. As of December 31, 2002, WCC’s common stock amounted to (Won)1,173,000 million ($977,174 thousand) consisting of 234,600,000 shares of common stock issued and outstanding. WCC is wholly owned by the Company. The head office of WCC is located in Seoul, Korea.
Woori Investment Bank (“WIB”, formerly Hanaro Investment Bank) was established with an initial capital of (Won)30,000 million ($24,992 thousand, 6,000,000 common shares issued), which was provided by the KDIC, on November 3, 2000, and initiated merchant bank services upon obtaining approval from the Financial Supervisory Commission on November 10, 2000. As of November 21, 2000, in accordance with the Financial Supervisory Commission’s directive, WIB took over (Won)2,490.2 billion ($2,074.5 million) of assets and (Won)5,462.9 billion ($4,550.9 million) of liabilities from four merchant banks (Yeungnam Merchant Banking Corp., Central Banking Corp., Korea Merchant Banking Corp. and H&S Investment Bank Corp.) considered as distressed financial institutions. In connection with the infusion of public funds, WIB and the KDIC have entered into an Agreement on the Implementation of the Business Plan. On September 1, 2001, WIB changed its name from Hanaro Investment Bank to Woori Investment Bank. As of December 31, 2002, WIB’s common stock amounted to (Won)2,491,200 million ($2,075,308 thousand) consisting of 498,240,000 shares issued and outstanding. WIB is wholly owned by the Company. The head office and three branches of WIB are located in Seoul, Korea.
Woori Finance Information System Co., Ltd. (“WFIS”, formerly Hanviteun System) was established on April 17, 1989 and is engaged in the business of installing computerized financial systems. On September 29, 2001, the Company purchased all the common stock of WFIS from Woori Bank, which was part of the group’s functional restructuring and therefore, WFIS was incorporated as a subsidiary of the Company. On October 15, 2001, WFIS changed its name from Hanviteun System Co., Ltd. to Woori Finance Information System Co., Ltd. As of December 31, 2002, its common stock amounted to (Won)4,500 million ($3,749 thousand) consisting of 900,000 shares issued and outstanding. WFIS is wholly owned by the Company. The office of WFIS is located in Seoul, Korea.
21
Woori F&I Co., Ltd. (“WF&I”, formerly Woori Asset Management Co., Ltd. (“WAMC”)) was established on November 16, 2001 to engage in the business of management, operation, and disposition of securitization assets. On September 13, 2002, WF&I, formerly WAMC, split off the asset management business segment and established Woori CA Asset Management Co., Ltd. (“WCAAMC”). As a result, WF&I is engaged in the business of acquisition and disposition of securities issued by asset securitization specialty corporations, established based on the Act on Asset-Backed Securitization for the purpose of non-performing assets securitization, and in the business of acquisition and disposition of equity of asset management corporations, which are established for the purpose of non-performing assets management. On September 16, 2002, WF&I changed its name from Woori Asset Management Co., Ltd. to Woori F&I Co., Ltd. As of December 31, 2002, its common stock amounted to (Won)10,000 million ($8,331 thousand) consisting of 2,000,000 shares issued and outstanding. WF&I is wholly owned by the Company. The office of WF&I is located in Seoul, Korea.
| (2) | Market Share |
Currently, Woori and Shinhan are the only domestic financial holding companies that have a separate banking business as a subsidiary.
(units: hundred millions of won)
| Items | As of end of 2002 | |||
| Woori Finance Holdings | Shinhan Finance Holdings | |||
| Total Assets |
73,891 | 47,850 | ||
| Total Liabilities |
23,250 | 7,748 | ||
| Total Shareholder’s Equity |
50,641 | 40,102 | ||
| Capital |
38,391 | 14,618 | ||
| Operating Revenue |
8,785 | 6,434 | ||
| Operating Expense |
3,027 | 412 | ||
| Operating Income |
5,758 | 6,022 | ||
| Ordinary Income |
5,892 | 6,039 | ||
| Net profit |
5,892 | 6,039 | ||
22
| (3) | Organization Chart |
23
| 2. | Overview of Operations |
| a. | Performance of Operations |
As a true financial holdings corporation under the Financial Holding Corporation Act, our main income is delivered through dividend payments of our subsidiaries. We are not involved in any other operations.
| b. | Financing and performance of operations |
| (1) | Source of Funds |
(units: millions of won)
| Items | 2003 Sept. 30 | 2002 Dec. 31 | 2001 Dec. 31 | |||
| Equity Capital |
5,794,288 | 5,064,129 | 4,077,347 | |||
| Total Capital |
3,877,525 | 3,839,074 | 3,637,293 | |||
| Capital Surplus |
61,324 | 58,645 | — | |||
| Retained Earnings |
1,448,635 | 1,145,518 | 558,501 | |||
| Capital Adjustments |
406,804 | 20,892 | -118,447 | |||
| Borrowings |
2,678,740 | 2,325,022 | 1,616,466 | |||
| Corporate Debentures |
2,293,926 | 1,999,250 | 1,298,304 | |||
| Bank Borrowings |
350,000 | 300,000 | 310,000 | |||
| CP |
— | — | — | |||
| Other Borrowings |
— | — | — | |||
| Other Liabilities |
34,814 | 25,772 | 8,162 | |||
| Total |
8,473,028 | 7,389,151 | 5,693,813 | |||
24
| (2) | Use of Funds |
(units: millions of won)
| Items | 2003 Sept. 30 | 2002 Dec. 31 | 2001 Dec. 31 | |||
| Treasury Stock |
7,157,484 | 6,062,119 | 5,016,864 | |||
| Woori Bank |
5,708,693 | 4,500,143 | 3,255,964 | |||
| Kyongnam Bank |
506,608 | 424,060 | 327,005 | |||
| Kwangju Bank |
375,280 | 290,003 | 213,177 | |||
| Woori Credit Card |
308,411 | 379,126 | 1,008,866 | |||
| Woori Merchant Bank |
— | 222,936 | 195,613 | |||
| Woori Financial Information System |
7,076 | 3,364 | 6,511 | |||
| Woori F&I |
30,862 | 17,016 | 9,728 | |||
| Woori First SPC |
— | — | — | |||
| Woori Second SPC |
33,260 | 31,666 | — | |||
| Woori Third SPC |
7,215 | — | — | |||
| Woori Investment Trust Management |
34,877 | 39,646 | — | |||
| Woori Securities |
145,202 | 154,159 | — | |||
| Loan Obligations |
980,811 | 1,231,207 | 648,365 | |||
| Tangible Assets |
237 | 324 | 627 | |||
| Intangible Assets |
43 | 50 | 24 | |||
| Cash |
290,814 | 73,256 | 13,825 | |||
| Other Assets |
43,639 | 22,195 | 14,108 | |||
| Total |
8,473,028 | 7,389,151 | 5,693,813 | |||
| c. | Transactions of Commission Fees |
| Category | Items | 2003 Sept. 30 | 2002 Dec. 31 | 2001 Dec. 31 | ||||
| Commission Revenue (A) |
||||||||
| Commission Expense (B) |
Fees | 2,568 | 5,611 | -4,641 | ||||
| Commission Profit (A-B) |
-2,568 | -5,611 | -4,641 | |||||
25
| 3. | Other Details Relevant to Investment Decision |
Instead of following the format of exhibiting BIS equity capital ratio and status of non performing loans to indicate capital adequacy and asset quality, we exhibit the current ratio and debt ratio as similar indicators under the ‘Finance holdings company Act’
| a. | Current Ratio (Won-denominated) |
(units: millions of won)
| Items | 2003 Sept. 30 | 2002 Dec.31 | 2001 Dec.31 | ||||||
| Current Assets (A) |
293,887 | 78,357 | 185,154 | ||||||
| Current Liabilities (B) |
206,185 | 9,317 | 316,615 | ||||||
| Current Ratio (A/B) |
142.5 | % | 841.0 | % | 58.5 | % | |||
| * | Current ratio based on won denominated positions |
| = | assets with maturity less than 3 months |
liabilities with maturity less than 3 months
| b. | Debt Ratio |
(units: millions of won)
| Items | 2003 Sept. 30 | 2002 Dec.31 | 2001 Dec.31 | ||||||
| Liabilities (A) |
2,678,740 | 2,325,022 | 1,616,466 | ||||||
| Equity (B) |
5,794,288 | 5,064,129 | 4,077,347 | ||||||
| Debt Ratio (A/B) |
46.2 | % | 45.9 | % | 39.7 | % | |||
26
| c. | Credit Ratings for the Past 3 years |
| Date of Rating |
Evaluated Securities |
Credit Rating |
Company (Ratings Range) |
Evaluation Category | ||||
| 2001.06.27 |
Debentures | AA+ | Korea Ratings (AAA~D) | Case evaluation | ||||
| 2001.06.28 |
Debentures | AA+ | KIS Ratings (AAA~D) | Case evaluation | ||||
| 2001.09.26 |
Debentures | AA+ | KIS Ratings (AAA~D) | Case evaluation | ||||
| 2001.09.26 |
Debentures | AA+ | Korea Ratings (AAA~D) | Case evaluation | ||||
| 2001.11.29 |
Debentures | BBB- | R&I (AAA~C) | Case evaluation | ||||
| 2002.10.17 |
Debentures | AA+ | Korea Ratings (AAA~D) | Case evaluation | ||||
| 2002.10.22 |
Debentures | AA+ | KIS Ratings (AAA~D) | Case evaluation | ||||
| 2002.11.8 |
Debentures | BBB | R&I (AAA~C) | Periodic evaluation | ||||
| 2002.12.13 |
Debentures | AA+ | Korea Ratings (AAA~D) | Case evaluation | ||||
| 2002.12.16 |
Debentures | AA+ | KIS Ratings (AAA~D) | Case evaluation | ||||
| 2003.06.30 |
Debentures | AA+ | KIS Ratings (AAA~D) | Periodic evaluation | ||||
| 2003.09.08 |
Debentures | AAA | Korea Ratings (AAA~D) | Case evaluation | ||||
| 2003.09.08 |
Debentures | AAA | KIS Ratings (AAA~D)) | Case evaluation | ||||
| d. | Other Important Information |
27
| III. | Financial Information |
| 1. | Summarized Financial Statements |
(units: millions of won)
| Items | 2003 Sept. 30 | 2002 Dec. 31 | 2001 Dec. 31 | ||||
| Cash and Due from Banks |
290,814 | 73,255 | 13,825 | ||||
| Securites |
7,157,484 | 6,062,119 | 5,016,864 | ||||
| Loans |
980,811 | 1,235,042 | 648,365 | ||||
| Fixed Assets |
280 | 374 | 651 | ||||
| Other Assets |
43,639 | 18,361 | 14,108 | ||||
| Total Assets |
8,473,028 | 7,389,151 | 5.693,813 | ||||
| Deposits |
350,000 | 300,000 | 310,000 | ||||
| Borrowings |
2,293,926 | 1,999,250 | 1,298,304 | ||||
| Other Liabilities |
34,814 | 25,772 | 8,162 | ||||
| Total Liabilities |
2,678,740 | 2,325,022 | 1,616,466 | ||||
| Common Stock |
3,877,525 | 3,839,074 | 3,637,293 | ||||
| Capital Surplus |
61,324 | 58,645 | — | ||||
| Retained Earnings |
1,448,635 | 1,145,518 | 588,501 | ||||
| Capital Adjustment |
406,804 | 20,892 | D | 118,447 | |||
| Total Stockholder’s Equity |
5,794,288 | 5,064,129 | 4,077,347 | ||||
| Operating Income |
509,780 | 878,488 | 717,112 | ||||
| Operating Cost |
139,323 | 302,721 | 31,222 | ||||
| Operating Net Income |
370,457 | 575,767 | 685,890 | ||||
| Ordinary Income |
370,091 | 589,214 | 685,885 | ||||
| Net Income |
370,091 | 589,214 | 684,102 | ||||
[ D stands for negative numbers]
| * | Refer to Exhibits to see detailed financial statements |
28
| IV. | Independent Auditor’s Opinion |
| 1. | Independent Auditor’s Opinion |
| a. | Independent Auditor |
| 2003 Sept. 30 | 2002 Sept. 30 | 2002 Dec. 2002 | 2001 Dec. 2001 | |||
| Deloitte & Touche |
Arthur Andersen | Deloitte Touche | Arthur Andersen | |||
| 2. | Compensation to the Independent Auditor |
| a. | Auditing Service |
(units: millions of won)
| Year | Auditor | Activity | Compensation | Accrued Time (hr) | ||||
| 2003 3Q |
Deloitte Touche | Half Year Interim Financial Statement | 70 | 400 | ||||
| Quarter Interim Financial Statement | 140 | 800 | ||||||
| 2002 |
Arthur Andersen | Quarter Interim Financial Statement | 140 | 1,200 | ||||
| Half Year Interim Financial Statement | 70 | 600 | ||||||
| Deloitte Touche | Annual Financial Statement | 30 | 300 | |||||
| 30 | 300 | |||||||
| 2001 |
Arthur Andersen | Quarter Interim Financial Statement | 80 | 800 | ||||
| b. | Compensation for services other than Audit |
(units: thousands of dollars)
| Year | Contract Date | Activity | Period | Comp. | Note | |||||
| 2003 1H |
2003.7.30 | US GAAP Auditing | 2003.8~2004.5 | 4,500 | Deloitte Touche | |||||
| 2002 |
2003.2.28 | US GAAP Auditing | 2002.12~2003.5 | 4,250 | Deloitte Touche | |||||
| 2001 |
2001.8.17 | US GAAP Auditing | 2001.8~2002.11 | 6,600 | Arthur Andersen | |||||
29
V. Corporate Governance & Affiliated Companies
| 1. | Overview of Corporate Governance |
| a. | Board of Directors |
| (1) | About the Board of Directors |
The Board of Directors consists of the Group’s chairman Byung-Chul Yoon, Vice chairman Duk-Hoon Lee(CEO of Woori Bank), Vice Chairman Kwang-Woo Jun(Chief Strategy Officer), Vice chairman Euoo-Sung Min(Chief Financial Officer). And for our non-standing directors, we have Nam-Hong Cho (Vice President of Korea Employer’s Federation), Sang-Chul Lee (Former CEO of Kookmin Bank), Chae-Woong Lee (professor of Sungkyunkwan University), Gae-Min Lee (CEO of Hankyung.com), Oh-seok Hyun (president of Trade Research Institute), and Hae-Suk Suh (legal consultant of Wu Hyun law firm).
| (a) | Duties of Boards of Directors |
| • | The Board of Directors shall consist of directors and shall determine the matters which are provided for as the authority of the Board of Directors under the relevant laws and regulations |
| • | The Board of Directors shall perform its duties set forth in the Rules for the Board of Directors for the purpose of enhancement of the shareholders’ benefits |
30
| (b) | Information Regarding Board of Directors |
| Position | Name | Information | Relationship with KDIC |
Transaction with WFG | ||||
| Non-standing Director candidate Audit Committee candidate |
Nam-Hong Cho |
— B.A. in Sociology, Seoul National Univ. — former Director of Int’l Labor Org. — Executive Vice President of Korea Employers Federation — Non-standing director of Woori Finance Holdings |
N/A | -C/S 496 shares | ||||
| Non-standing Director candidate Audit Committee candidate |
Sang-Chul Lee |
— B.A. in commerce, Seoul National University — former CEO of Kookmin Bank — Non-standing director of Samsung SDI, co. — Non-standing director of Woori Finance Holdings |
N/A | N/A | ||||
| Non-standing Director candidate Audit Committee candidate |
Chae- Woong Lee |
— B.A. in economics, Seoul National University — Former Vice President & Professor at Sungkyunkwan University — Non-standing director of Woori Finance Holdings |
N/A | N/A | ||||
| Non-standing Director candidate Audit Committee candidate |
Gae-Min Lee |
— B.A. in economics, Kyung Hee University — former Chief Editorial Writer of Korea Economic Daily — CEO of Hangkyung.com — Non-standing director of Woori Finance Holdings |
N/A | N/A | ||||
| Non-standing Director candidate Audit Committee candidate |
Hae-Suk Suh |
— B.A. in English, Ewha Women’s University — J.D. from Santa Clara law school — former Attorney at Baker & Mckenzie — Foreign legal consultant at Wu Hyun law firm — Non-standing director of Woori Finance Holdings |
N/A | N/A | ||||
| Non-standing Director candidate Audit Committee candidate |
Oh-Seok Hyun |
— B.A. in Business Administration, Seoul National University — Ph.D. in economics, University of Pennsylvania — _______ — former employee at Ministry of Finance and Economy — President of Trade Research Institute, Korean Int’l Trade Association |
N/A | N/A | ||||
31
| (c) | Appointment of Non-standing Directors |
The outside directors of the Company shall be elected at the General Meeting of Shareholders after being recommended by the Recommendation Committee for Outside Director Candidates to be established under Article 42. However, this is not applicable for the first fiscal year of the company.
| * | Article 42 (Committee) |
| 1. | We currently have the following management committee that serves under the board. |
| 1. | The Management Committee |
| 2. | The Business Strategy & Compensation Committee |
| 3. | The Risk Management Committee |
| 4. | The Audit Committee |
| 5. | Committees constituted by directors |
| 2. | The duties, rights, and management of each committee is appointed by the Board of Directors. |
| (d) | Committees within Board of Directors |
| 1) | The Management Committee |
| Name | Non-standing Director |
Notes | ||
| Byung-Chul Yoon |
X | Chairman Byung-Chul Yoon heads the committee and non-standing directors constitute more than half of the committee | ||
| Kwang-Woo Jun |
X | |||
| Nam-Hong Cho |
O | |||
| Sang-Chul Lee |
O | |||
| Gae-Min Lee |
O | |||
| 2) | Risk Management Committee |
| Name | Position | Notes | ||
| Byung-Chul Yoon |
Chairman and CEO | The representative director is Byung-Chul Yoon, and is consisted of 2 directors and 3 non-standing directors | ||
| Euoo-Sung Min |
Vice Chairman | |||
| Chae-Woong Lee |
Non-standing Director | |||
| Oh-Seok Hyun |
Non-standing Director | |||
| Hae-Suk Suh |
Non-standing Director | |||
32
| 3) | Business Strategy & Compensation Committee |
| Name | Position | Notes | ||
| Nam-Hong Cho |
Non-standing Director | The representative director is Sang-Chul Lee, and is consisted of 6 non-standing directors | ||
| Sang-Chul Lee |
Non-standing Director | |||
| Chae-Woong Lee |
Non-standing Director | |||
| Gae-Min Lee |
Non-standing Director | |||
| Oh-Seok Hyun |
Non-standing Director | |||
| Hae-Suk Suh |
Non-standing Director | |||
| 4) | Audit Committee |
| Name | Position | Notes | ||
| Nam-Hong Cho |
Non-standing Director | The representative director is Sang-Chul Lee, and is consisted of 6 non-standing directors | ||
| Sang-Chul Lee |
Non-standing Director | |||
| Chae-Woong Lee |
Non-standing Director | |||
| Gae-Min Lee |
Non-standing Director | |||
| Oh-Seok Hyun |
Non-standing Director | |||
| Hae-Suk Suh |
Non-standing Director | |||
| 5) | Standing Committee |
| Name | Position | Notes | ||
| Byung-Chul Yoon |
Chairman and CEO | The representative director is Byung-Chul Yoon, and is consisted of 4 directors | ||
| Euoo-Sung Min |
Vice Chairman | |||
| Kwang-woo Jun |
Vice Chairman | |||
| Duk-Hoon Lee |
Vice Chairman | |||
33
| 2. | Related Companies |
| a. | Invested shares in related companies |
| Investor | Investee | Number of Invested Stock |
Stock Share (%) | |||
| Woori Finance Holdings | Woori Bank | 570,567,520 | 100.0 | |||
| Kyongnam Bank | 51,800,000 | 99.9 | ||||
| Kwangju Bank | 34,080,000 | 99.9 | ||||
| Woori Credit Card | 402,600,000 | 100.0 | ||||
| Woori Finance Information Systems | 900,000 | 100.0 | ||||
| Woori F&I | 2,000,000 | 100.0 | ||||
| SPC Series 1 | 1,900 | 95.0 | ||||
| SPC Series 2 | 1,900 | 95.0 | ||||
| SPC Series 3 | 2,000 | 100.0 | ||||
| Woori Investment Management | 6,000,000 | 100.0 | ||||
| Woori Securities | 13,250,570 | 40.2 | ||||
| Woori Bank |
Woori America Bank | 8,500,000 | 100.0 | |||
| P.T. Bank Woori Indonesia | 1,387 | 81.6 | ||||
| Woori Credit Information | 1,008,000 | 100.0 | ||||
| Shinwoo CRC | 437,525 | 76.6 | ||||
| Woori Credit Card |
Nexbi Tech. | 102,000 | 50.5 | |||
| Woori F&I |
Woori CA Asset Management | 408,000 | 51.0 | |||
| Woori LB SPC Series 1 | 480,000 | 30.0 | ||||
| Woori LB SPC Series 2 | 138,000 | 30.0 | ||||
| Woori LB SPC Series 3 | 414,000 | 30.0 | ||||
| Woori LB SPC Series 4 | 432,000 | 30.0 | ||||
34
| b. | Year-end Performance of Affiliated companies and Subsidiaries |
Name : Woori Bank Co., Ltd.
| Company number : 00254045 |
(units: millions of won | ) |
| Items | Period 169 (2002.12.31) |
Period 168 (2001.12.31) |
Period 167 (2000.12.31) | |||
| Cash and Due from Banks |
4,098,110 | 3,911,225 | 6,036,374 | |||
| Trading securities |
813,173 | 1,146,336 | 882,822 | |||
| Investment securities |
17,930,546 | 17,223,404 | 15,973,928 | |||
| Loans |
58,967,737 | 48,177,595 | 41,817,343 | |||
| Fixed Assets |
1,762,660 | 1,843,368 | 1,887,783 | |||
| Others |
3,905,144 | 4,355,840 | 4,768,757 | |||
| Total Assets |
87,477,370 | 76,657,768 | 69,845,987 | |||
| Deposits in Won |
58,586,891 | 50,645,040 | 43,363,016 | |||
| Deposits in Foreign exchange |
3,251,760 | 2,386,192 | 2,473,836 | |||
| CDs |
346,214 | 737,106 | 1,337,053 | |||
| Borrowings in Won |
3,548,478 | 3,598,368 | 2,704,657 | |||
| Borrowings in Foreign exchange |
4,775,613 | 4,491,778 | 5,135,267 | |||
| Foreign exchange trust |
— | 128,797 | 2,189,036 | |||
| Other Borrowings |
1,684,546 | 2,664,915 | 3,438,013 | |||
| Debentures |
5,941,886 | 3,084,569 | 3,048,994 | |||
| Other Liabilities |
5,199,018 | 5,992,471 | 5,412,035 | |||
| Total Liabilities |
83,334,406 | 73,729,236 | 67,580,887 | |||
| Capital |
2,764,400 | 2,764,400 | 2,764,400 | |||
| Capital Surplus |
516,026 | 31,903 | — | |||
| Retained Earnings |
845,686 | 203,690 | -454,686 | |||
| Capital Adjustments |
16,852 | -71,461 | -44,614 | |||
| Total Shareholder’s Equity |
4,142,964 | 2,928,532 | 2,265,100 | |||
| Operating Revenue |
6,607,882 | 6,848,493 | 7,382,216 | |||
| Operating Income |
602,949 | 283,194 | -4,158,890 | |||
| Ordinary Income |
595,988 | 610,679 | -5,014,380 | |||
| Net Increase |
779,571 | 712,945 | -3,006,414 | |||
| * | Accounting policy changes in period 169 brought retroactive changes go periods 167 and 168, |
35
Name of Company : Kyongnam Bank
| Company Number : 00101363 |
(units: millions of won) |
| (2002.12.31) | (2001.12.31) | (2000.12.31) | ||||
| Cash and Due from Banks |
1,148,371 | 1,387,331 | 731,220 | |||
| Trading securities |
154,909 | 2,897 | 144,001 | |||
| Investment securities |
2,380,128 | 2,174,229 | 1,703,581 | |||
| Loans |
5,820,207 | 4,744,317 | 4,283,601 | |||
| Fixed Assets |
208,970 | 214,581 | 235,943 | |||
| Other Assets |
263,262 | 236,469 | 339,461 | |||
| Total Assets |
9,975,847 | 8,759,824 | 7,437,807 | |||
| Deposits |
7,544,267 | 5,930,100 | 4,943,281 | |||
| Borrowings |
1,286,963 | 1,435,321 | 1,395,427 | |||
| Debentures |
303,304 | 424,974 | 360,956 | |||
| Other Liabilities |
430,271 | 656,059 | 487,967 | |||
| Total Liabilities |
9,564,805 | 8,446,454 | 7,187,630 | |||
| Capital |
259,000 | 259,000 | 259,000 | |||
| Capital Surplus |
26,910 | 26,906 | — | |||
| Retained Earnings |
129,191 | 51,905 | — | |||
| Capital Adjustments |
-4,059 | -24,441 | -35,729 | |||
| Total Shareholder’s Equity |
411,042 | 313,370 | 250,177 | |||
| Operating Revenue |
742,141 | 721,643 | 709,255 | |||
| Operating Income |
107,423 | 87,040 | -318,224 | |||
| Ordinary Income |
82,466 | 69,158 | -405,233 | |||
| Net Income |
82,466 | 69.158 | -311,233 | |||
| * | Accounting policy changes in period 41 brought about retroactive changes to period 40, but not reflected in period 39 |
36
Name of Company : Kwangju Bank
| Company Number : 00104078 |
(units: millions of won) |
| Period 44 (2002.12.31) |
Period 43 (2001.12.31) |
Period 42 (2000.12.31) | ||||
| Cash and Due from Banks |
386,827 | 299,088 | 469,370 | |||
| Trading securities |
143,525 | 146,081 | 20,732 | |||
| Investment securities |
1,968,418 | 2,056,441 | 1,272,820 | |||
| Loans |
4,896,333 | 3,964,489 | 3,257,542 | |||
| Fixed Assets |
224,952 | 229,929 | 292,252 | |||
| Others |
426,879 | 424,910 | 773,299 | |||
| Total Assets |
8,046,934 | 7,120,938 | 6,086,014 | |||
| Deposits |
6,077,260 | 5,250,418 | 4,465,783 | |||
| Borrowings |
967,696 | 946,702 | 648,861 | |||
| Debentures |
200,485 | 297,723 | 297,691 | |||
| Other Liabilities |
532,307 | 434,702 | 525,765 | |||
| Total Liabilities |
7,777,748 | 6,929,545 | 5,938,099 | |||
| Capital |
170,403 | 170,403 | 170,400 | |||
| Retained Earnings |
98,185 | 26,813 | -35,787 | |||
| Capital Adjustments |
598 | -5,822 | 13,303 | |||
| Total Shareholder’s Equity |
269,186 | 191,394 | 147,915 | |||
| Operating Revenue |
578,844 | 532,712 | 585,152 | |||
| Operating Income |
85,962 | 71,290 | -107,980 | |||
| Ordinary Income |
74,839 | 66,346 | -413,652 | |||
| Net Income |
74,839 | 66,346 | -140,552 | |||
| * | Accounting policy changes in period 43 brought retroactive changes go periods 42 and 41. |
37
Name : Woori Credit Card
Company Number : 00171308
(units: millions of won)
| Period 12 (2002.12.31) |
Period 11 (2001.12.31) |
Period 10 (2000.12.31) | ||||
| Cash and Due from Banks |
968,933 | 322,304 | 438,515 | |||
| Trading securities |
0 | — | 328,677 | |||
| Investment securities |
856,374 | 214,112 | 1,010,240 | |||
| Loans |
2,669,542 | 642,611 | 3,613,293 | |||
| Fixed Assets |
160,991 | 11,583 | 34,486 | |||
| Others |
48,374 | 158,065 | 594,401 | |||
| Total Assets |
4,704,214 | 1,348,675 | 6,019,611 | |||
| Deposits |
— | — | 3,982,820 | |||
| Borrowings |
1,137,547 | — | 1,155,558 | |||
| Debentures |
3,198,006 | — | 204,742 | |||
| Other Liabilities |
60,637 | 408,689 | 432,212 | |||
| Total Liabilities |
4,396,190 | 408,689 | 5,775,332 | |||
| Capital |
1,173,000 | 1,173,000 | 273,000 | |||
| Capital Surplus |
— | — | 11,113 | |||
| Retained Earnings |
-332,565 | -181,146 | — | |||
| Capital Adjustments |
-532,411 | -51,868 | -39,834 | |||
| Total Shareholder’s Equity |
308,024 | 939,686 | 244,279 | |||
| Operating Revenue |
915,039 | 588,710 | 838,722 | |||
| Operating Income |
21,660 | -105,097 | -151,415 | |||
| Ordinary Income |
-151,419 | -271,625 | -457,163 | |||
| Net Income |
-151,419 | -150,665 | -118,263 | |||
38
Company : Woori Investment Management
Company Number : 00243377
(units: millions of won)
| Period 15 (2002.12.31) |
Period 14 (2001.12.31) |
Period 13 (2000.12.31) | ||||
| Current Assets |
27,878 | 30,235 | 26,984 | |||
| Fixed Assets |
13,490 | 12,839 | 12,255 | |||
| Total Assets |
41,368 | 43,074 | 39,239 | |||
| Current Liabilities |
3,686 | 6,172 | 4,088 | |||
| Fixed Liabilities |
177 | 124 | — | |||
| Total Liabilities |
3,863 | 6,296 | 4,088 | |||
| Capital |
30,000 | 30,000 | 30,000 | |||
| Capital Surplus |
— | — | — | |||
| Retained Earnings |
7,504 | 6,778 | 5,150 | |||
| Capital Adjustments |
— | — | — | |||
| Total Shareholder’s Equity |
37,504 | 36,778 | 35,150 | |||
| Operating Income |
10,360 | 11,830 | 13,522 | |||
| Operating Profit |
5,276 | 4,348 | 7,388 | |||
| Ordinary Income |
5,330 | 4,568 | 8,233 | |||
| Net Income |
3,726 | 3,128 | 7,083 | |||
39
Name of Company : Woori Credit Information
Company Number : 00378947
(units: millions of won)
| Period 14 (2002.12.31) |
Period 13 (2001.12.31) |
Period 12 (2000.12.31) | ||||
| Current Assets |
76,504 | 5,933 | 9,384 | |||
| Fixed Assets |
164549 | 2882 | 806 | |||
| Total Assets |
241,053 | 8,815 | 10,190 | |||
| Current Liabilities |
53942 | 2362 | 5016 | |||
| Fixed Liabilities |
184349 | 373 | 217 | |||
| Total Liabilities |
238291 | 2735 | 5233 | |||
| Capital |
4,500 | 4,500 | 4,500 | |||
| Capital Surplus |
— | — | — | |||
| Retained Earnings |
-1738 | 1580 | 457 | |||
| Capital Adjustments |
— | — | — | |||
| Total Shareholder’s Equity |
2,762 | 6,080 | 4,957 | |||
| Sales |
131,843 | 25,444 | 14,723 | |||
| Operating Income |
4,404 | 1,127 | 1,273 | |||
| Ordinary Income |
-3190 | 1421 | 1546 | |||
| Net Income |
-3318 | 1123 | 1153 | |||
40
Name of Company : Woori Securities
Company Number : 00163178
(units: millions of won)
| Period 15 (2002.12.31) |
Period 14 (2001.12.31) |
Period 13 (2000.12.31) | ||||
| Current Assets |
415,148 | 445,810 | 375,147 | |||
| Fixed Assets |
125,686 | 171,517 | 147,767 | |||
| Total Assets |
540,834 | 617,327 | 522,914 | |||
| Current Liabilities |
180,613 | 231,064 | 148,284 | |||
| Fixed Liabilities |
4,585 | 7,449 | 2,912 | |||
| Total Liabilities |
185,198 | 238,513 | 151,196 | |||
| Capital |
164,782 | 164,782 | 164,782 | |||
| Capital Surplus |
131,776 | 131,776 | 131,424 | |||
| Retained Earnings |
97,156 | 105,902 | 93,355 | |||
| Capital Adjustments |
-38,078 | -23,646 | -17,843 | |||
| Total Shareholder’s Equity |
355,636 | 378,814 | 371,718 | |||
| Operating Revenue |
186,664 | 205,208 | 215,602 | |||
| Operating Income |
21,332 | 45,434 | 41,728 | |||
| Ordinary Income |
1,570 | 56,434 | 30,835 | |||
| Net Income |
1,627 | 40,107 | 20,401 | |||
41
Company Name : Woori F&I
Company Number : 00416593
(units: millions of won)
| Period 2 (2002.12.31) |
Period 1 (2001.12.31) | |||
| Current Assets |
2,290 | 8,531 | ||
| Fixed Assets |
52,493 | 1,153 | ||
| Total Assets |
54,783 | 9,684 | ||
| Current Liabilities |
2,323 | 50 | ||
| Fixed Liabilities |
37,033 | — | ||
| Total Liabilities |
39,356 | 50 | ||
| Capital |
10,000 | 10,000 | ||
| Capital Surplus |
— | — | ||
| Retained Earnings |
5,461 | -366 | ||
| Capital Adjustments |
-34 | — | ||
| Total Shareholder’s Equity |
15,427 | 9,634 | ||
| Operating Revenue |
18,913 | 196 | ||
| Operating Income |
10,253 | -414 | ||
| Ordinary Income |
10,335 | -366 | ||
| Net Income |
7,327 | -366 | ||
42
Company Name : Woori First Asset Securitization Specialty
| Company Number : 00389086 |
(units: millions of won | ) |
| Period 2 (2002.12.31) |
Period 1 (2001.12.31) | |||
| Current Assets |
19,202 | 48,284 | ||
| Securitized Assets |
51,048 | 437,482 | ||
| Fixed Assets |
— | 1 | ||
| Total Assets |
70,250 | 485,767 | ||
| Current Liabilities |
13,271 | 1,297 | ||
| Securitized Liabilities |
188,847 | 484,487 | ||
| Total Liabilities |
202,118 | 485,784 | ||
| Capital |
10 | 10 | ||
| Capital Surplus |
— | — | ||
| Retained Earnings |
-131,878 | -27 | ||
| Capital Adjustments |
— | — | ||
| Total Shareholder’s Equity |
-131,868 | -17 | ||
| Operating Revenue |
66,576 | 5,593 | ||
| Operating Income |
-133,252 | -2,259 | ||
| Ordinary Income |
-131,852 | -27 | ||
| Net Income |
-131,852 | -27 | ||
43
Company Name : Woori Second Asset Securitization Specialty
| Company Number : 00391665 |
(units: millions of won | ) |
| Period 2 (2002.12.31) |
Period 1 (2001.12.31) | |||
| Current Assets |
23,560 | 10 | ||
| Securitized Assets |
74,106 | 167,136 | ||
| Fixed Assets |
97,666 | 167,146 | ||
| Total Assets |
51,269 | 167,170 | ||
| Current Liabilities |
59,936 | 0 | ||
| Securitized Liabilities |
111,205 | 167,170 | ||
| Total Liabilities |
10 | 10 | ||
| Capital |
— | — | ||
| Capital Surplus |
-13,549 | -34 | ||
| Retained Earnings |
— | — | ||
| Capital Adjustments |
-13,539 | -24 | ||
| Total Shareholder’s Equity |
52,425 | — | ||
| Operating Revenue |
32,553 | -34 | ||
| Operating Income |
33,367 | -34 | ||
| Ordinary Income |
33,329 | -34 | ||
| Net Income |
||||
44
Company Name : Woori Third Asset Securitization Specialty
| Company Number : 00399357 |
(units: millions of won | ) |
| Period 1 (2002.12.31) | ||
| Current Assets |
18,226 | |
| Securitized Assets |
48,764 | |
| Total Assets |
66,990 | |
| Current Liabilities |
71,444 | |
| Securitized Liabilities |
65,204 | |
| Total Liabilities |
136,648 | |
| Capital |
10 | |
| Capital Surplus |
— | |
| Retained Earnings |
-69,668 | |
| Capital Adjustments |
— | |
| Total Shareholder’s Equity |
-69,658 | |
| Operating Revenue |
33,566 | |
| Operating Income |
-10,008 | |
| Ordinary Income |
-9,899 | |
| Net Income |
-9,899 | |
45
Company Name: Woori CA Asset Management
| Company Number : |
(units: millions of won | ) |
| Period 1 (2002.12.31) | ||
| Current Assets |
4,854 | |
| Securitized Assets |
1,379 | |
| Total Assets |
6,223 | |
| Current Liabilities |
1,302 | |
| Securitized Liabilities |
358 | |
| Total Liabilities |
1,660 | |
| Capital |
4,000 | |
| Retained Earnings |
573 | |
| Total Shareholder’s Equity |
4,573 | |
| Operating Revenue |
4,070 | |
| Operating Income |
1,324 | |
| Ordinary Income |
1,348 | |
| Net Income |
908 | |
| * | Refer to Business Report of Woori Bank for the performances of Woori Credit Information, Woori America Bank, and Woori Indonesia Bank |
46
| 3. | Investment in Other Companies |
(units: thousand shares, millions of won)
| T y p e |
Name | Beginning Balance |
Changes |
Ending Bal. |
Summary |
Dividend Revenue | ||||||||||||||||
| Quanjtity | Share | Cost | Quantity | Cost | Quantity | Share | Cost | Date | ||||||||||||||
| D O M E S T I C |
Woori Bank (*1) |
552,880 | 100.0 | 2,741,818 | 17,688 | 170,493 | 570,568 | 100.0 | 2,912,311 | 2001.3.27 2003.7.31 |
518,601 | |||||||||||
| Kwangju Bank |
34,080 | 99.9 | 170,400 | — | — | 34,080 | 99.9 | 170,400 | 2001.3.27 | 3,408 | ||||||||||||
| Kyong-nam Bank |
51,800 | 99.9 | 259,000 | — | — | 51,800 | 99.9 | 259,000 | 2001.3.27 | 5,180 | ||||||||||||
| Woori Credit Card |
234,600 | 100.0 | 1,173,000 | 168,000 | 840,000 | 402,600 | 100.0 | 2,013,000 | 2002.3.27 | — | ||||||||||||
| Woori Merchant Bank |
498,240 | 100.0 | 170,493 | 498,240 | 170,493 | 2001.3.27 | — | |||||||||||||||
| Woori Inv’t Mgmt. |
6,000 | 100.0 | 39,128 | — | — | 6,000 | 100.0 | 39,128 | 2002.3.29 | 6,000 | ||||||||||||
| Woori Securities |
13,251 | 40.2 | 152,662 | — | — | 13,250 | 40.2 | 152,662 | 2002.7.29 | 5,300 | ||||||||||||
| Woori Finance Info Sys. |
900 | 100.0 | 5,244 | — | — | 900 | 100.0 | 5,244 | 2001.9.29 | — | ||||||||||||
| Woori F&I |
2,000 | 100.0 | 10,094 | — | — | 2,000 | 100.0 | 10,094 | 2001.12.3 | 1,500 | ||||||||||||
| Woori 1st SPC |
1.9 | 95.0 | 9.6 | — | — | 1.9 | 95.0 | 9.6 | 2001.12.3 | |||||||||||||
| Woori 2nd SPC |
1.9 | 95.0 | 9.6 | — | — | 1.9 | 95.0 | 9.6 | 2001.12.26 | |||||||||||||
| Woori 3rd SPC |
2 | 100.0 | 10 | — | — | 2 | 100.0 | 10 | 2002.3.15 | |||||||||||||
| Foreign |
||||||||||||||||||||||
| Total |
1,393,756 | — | 4,721,869 | 683,928 | 1,180,986 | 1,411,444 | — | 5,561,872 | — | 539,989 | ||||||||||||
| * | Dividends derived from fiscal basis |
| 1. | Woori Bank and Woori Merchant Bank were merged in 2003 July 31 |
| 2. | Woori Finance Holdings injected capital into Woori Credit Card on 2003 March 27 and 2003 Sept. 30 |
47
| VI. | Stock Information |
| 1. | Stock Distribution |
| a. | Stock Information of Major Shareholders and Related Parties |
| (as of 2003.09.30) |
(units: shares, %) |
| Name | Relation | Type | Shares Held | Reasons Behind Change | ||||||||||||||
| Beginning balance | (+) | (-) | Ending balance | |||||||||||||||
| Stock | Share | Stock | Share | |||||||||||||||
| KDIC |
Major S/H | C/S | 673,458,609 | 87.7 | 673,458,609 | 86.8 | ||||||||||||
| C/S | 673,458,609 | 87.7 | 673,458,609 | 86.8 | ||||||||||||||
| Total |
P/S | |||||||||||||||||
| Total | 673,458,609 | 87.7 | 673,458,609 | 86.8 | ||||||||||||||
Major Shareholder : KDIC
| b. | Share Ownership of more than 5% |
| (as of 2003.09.30) |
(units: shares, %) |
| No. | Name | Common Stock | Preferred Stock | Total | ||||||||||
| No. of shares | % | No. of shares | % | No. of shares | % | |||||||||
| 1 |
KDIC | 673,458,609 | 86.8 | 673,458,609 | 86.8 | |||||||||
| Total |
673,458,609 | 86.8 | 673,458,609 | 86.8 | ||||||||||
48
| c. | Shareholder Distribution |
(as of 2002. 12. 31)
| Items | Shareholder number |
Ratio | Number of shares |
Ratio | ||||
| Government |
0 | — | 0 | — | ||||
| Government related companies |
1 | 0.00% | 673,458,609 | 87.71% | ||||
| Securities companies |
39 | 0.18% | 1,508,598 | 0.20% | ||||
| Insurance companies |
3 | 0.01% | 224,393 | 0.03% | ||||
| Asset Management |
129 | 0.59% | 44,648,339 | 5.81% | ||||
| Financial Institutions |
2 | 0.01% | 24,430 | 0.00% | ||||
| Finance Companies |
2 | 0.01% | 42,499 | 0.01% | ||||
| Financial Groups |
0 | 0.00% | 0 | 0.00% | ||||
| Mutual Savings |
19 | 0.09% | 908,735 | 0.12% | ||||
| Other companies |
61 | 0.28% | 703,743 | 0.09% | ||||
| Individuals |
21,477 | 98.62% | 40,993,736 | 5.34% | ||||
| Foreigners |
44 | 0.20% | 5,295,222 | 0.69% | ||||
| KSD |
1 | 0.00% | 6,493 | 0.00% | ||||
| Total |
21,778 | 100.0% | 767,814,797 | 100.0% | ||||
| d. | Total Minority Shareholders, Major Shareholders, and Other Shareholders |
(as of 2002.12.31)
| Items | Shareholder number |
Ratio | Number of shares |
Ratio | Notes | |||||||
| Total Minority shareholders |
21,774 | 99.98 | % | 67,208,127 | 8.75 | % | ||||||
| Minority Shareholders (companies) |
283 | 1.30 | % | 41,579,588 | 5.42 | % | ||||||
| Minority Shareholders (individuals) |
21,491 | 98.68 | % | 25,610,539 | 3.34 | % | ||||||
| Major shareholder |
1 | 0.00 | % | 673,458,609 | 87.71 | % | ||||||
| Total other shareholders |
2 | 0.01 | % | 27,141,568 | 3.53 | % | ||||||
| Other shareholders (companies) |
1 | 0.00 | % | 11,702,338 | 1.52 | % | ||||||
| Other shareholders (individuals) |
1 | 0.00 | % | 15,439,230 | 2.01 | % | ||||||
| KSD |
1 | 0.00 | % | 6,493 | 0.00 | % | ||||||
| Total |
21,778 | 100.00 | % | 767,814,797 | 100.00 | % | ||||||
49
| 2. | Stock Price and Stock Market Performance for the Past 6 Months |
| a. | Domestic Stock Market |
(units: won, shares)
| Period | April | May | June | July | August | September | ||||||||
| High | 5,020 | 5,740 | 6,480 | 7,250 | 7,450 | 7,450 | ||||||||
| Low |
3,895 | 4,500 | 5,720 | 6,080 | 5,960 | 6,020 | ||||||||
| Monthly Trade Volume |
33,501,308 | 31,342,260 | 40,178,067 | 37,570,870 | 35,207,308 | 32,805,327 | ||||||||
| High | ||||||||||||||
| Low | ||||||||||||||
| Monthly Trade Volume |
||||||||||||||
| b. | Foreign Stock Market |
| (name of market : NYSE) |
(units: dollars, shares) |
| Period | September | |||||||||||||
| ADR |
High | 16.25 | ||||||||||||
| Low | 16.25 | |||||||||||||
| Monthly Trade Volume |
100 | |||||||||||||
| High | ||||||||||||||
| Low | ||||||||||||||
| Monthly Trade Volume |
||||||||||||||
| * | The ADR exchange ratio is 3:1 |
50
| VII. | Directors and Employee Information |
| 1. | Directors |
| Position | Name | Date of Birth | Common Stocks Owned | |||||
| Chairman |
Registered | Byung-Chul Yoon | 1937.5.15 | 49,973 | ||||
| Vice Chairman |
Registered | Kwang-Woo Jun | 1949.5.7 | |||||
| Vice Chairman |
Registered | Euoo-Sung Min | 1954.3.15 | |||||
| Vice Chairman |
Registered | Duk-Hoon Lee | 1949.7.10 | |||||
| Managing Director |
Non-registered | Sam-soo Pyo | 1951.12.12 | |||||
| Managing Director |
Non-registered | Hwan-Kyu Park | 1952.12.12 | |||||
| Managing Director |
Non-registered | Won-Gihl Sohn | 1953.9.27 | |||||
| Managing Director |
Non-registered | Tae-Ho Son | 1949.12.14 | |||||
| Managing Director |
Non-registered | Ki-Chul Han | 1945.3.20 | |||||
| Non-standing Director |
Registered | Gae-Min Lee | 1946.11.1 | |||||
| Non-standing Director |
Registered | Sang-Chul Lee | 1936.11.30 | 895 | ||||
| Non-standing Director |
Registered | Chae-Woong Lee | 1942.5.2 | |||||
| Non-standing Director |
Registered | Nam-Hong Cho | 1936.6.20 | |||||
| Non-standing Director |
Registered | Oh-Seok Hyun | 1950.5.5 | |||||
| Non-standing Director |
Registered | Hae-Suk Suh | 1953.11.14 | |||||
| 2. | Employee Status |
(units: no. of , shares)
| Items | Staff | Average Tenure |
Quarterly Compensation |
Average Per Person |
Note | |||||||||||
| Admin. | Manu. | Misc. | Total | |||||||||||||
| Male |
44 | — | 4 | 48 | 2.8 | 2,685,429 | 55,946 | |||||||||
| Female |
4 | — | 8 | 12 | 2.8 | 390,374 | 32,531 | |||||||||
| Total |
48 | 12 | 60 | 2.8 | 3,075,783 | 51,263 | ||||||||||
| * | Based on compensation from Jan. to Sept. |
51
| VIII. | Related Party Transactions |
| 1. | Transactions with Major shareholders |
| a. | Transactions of Provisional Payments and Loans(including securities loans) |
(units: millions of won)
| T Y P e |
Transactions of provisional payments & loans | |||||||||||||||||||||
| Name | Relation | Item |
Conditions | Changes | ||||||||||||||||||
| Date | Maturity Date |
Interest Rate | Beg. | Change | End. | |||||||||||||||||
| Loan | Borrow | + | – | |||||||||||||||||||
| D O M E S T I C |
Woori 1st SPC |
subsidiary | Other loan | 2001.12.21 | 2010.12.21 | 7.5% | — | 188,847 | — | 15,472 | 173,375 | |||||||||||
| Woori 2nd SPC | subsidiary | Other loan | 2002.1.8 | 2012.1.8 | 7.5% | — | 59,936 | — | 41,400 | 18,536 | ||||||||||||
| Woori 3rd SPC | subsidiary | Other loan | 2002.4.15 | 2012.4.15 | 7.8% | — | 65,204 | — | 35,414 | 29,790 | ||||||||||||
| Woori Bank | subsidiary | Other loan | 2002.9~ 2002.11 |
10 yr | 0% | — | 600,000 | — | — | 600,000 | ||||||||||||
| Kwangju Bank | subsidiary | Other loan | 2002.12.31 | 10 yr | 0% | — | 50,000 | — | — | 50,000 | ||||||||||||
| Woori Credit Card | subsidiary | Other loan | 2002.12.27 | 6yr | 6.62% | — | 200,000 | — | 200,000 | — | ||||||||||||
| Woori Finance Info. Sys | subsidiary | Other loan | 2002.4 ~ 2002.10 |
4 yr | 7.3% ~ 7.8% |
— | 180,000 | — | — | 180,000 | ||||||||||||
| Woori F&I | subsidiary | Other loan | 2002.9 ~ 2003.3 |
4yr | 7.3% ~ 7.6% |
— | 34,600 | 90,000 | 10,400 | 114,200 | ||||||||||||
| Foreign |
— | — | — | |||||||||||||||||||
| Total |
1,378,587 | 90,000 | 302,686 | 1,165,901 | ||||||||||||||||||
52
| b. | Payment Transactions |
| Transactions of Payments | ||||||||||||||||
| Name | Relation | Item | Par value |
Transactions | Gain/ Loss | |||||||||||
| Beginning | Increase | Decrease | Ending | |||||||||||||
| Woori Bank | Subsidiary | Investment stock | 5,000 | 4,500,143 | 935,766 | 138,220 | 5,297,689 | |||||||||
| Kyongnam Bank |
Subsidiary | Investment stock | 5,000 | 424,060 | 61,953 | 5,180 | 480,833 | |||||||||
| Kwangju Bank |
Subsidiary | Investment stock | 5,000 | 290,003 | 60,565 | 3,408 | 347,160 | |||||||||
| Woori Credit Card |
Subsidiary | Investment stock | 5,000 | 379,126 | 200,000 | 257,635 | 321,491 | |||||||||
| Woori Merchant Bank | Subsidiary | Investment stock | 5,000 | 222,936 | 56,465 | 279,401 | ||||||||||
| Woori Finance Info. System |
Subsidiary | Investment stock | 5,000 | 3,364 | 3,324 | 6,688 | ||||||||||
| Woori F&I | Subsidiary | Investment stock | 5,000 | 17,016 | 13,005 | 1,500 | 28,521 | |||||||||
| Woori 1st SPC | Subsidiary | Investment stock | 5,000 | — | — | — | — | |||||||||
| Woori 2nd SPC | Subsidiary | Investment stock | 5,000 | 31,666 | 5,528 | — | 37,194 | |||||||||
| Woori 3rd SPC | Subsidiary | Investment stock | 5,000 | — | 1,885 | — | 1,885 | |||||||||
| Woori Inv’t Mgmt | Subsidiary | Investment stock | 5,000 | 39,646 | 1,187 | — | 40,833 | |||||||||
| Woori Securities | Subsidiary | Investment stock | 5,000 | 154,159 | — | 8,890 | 145,269 | |||||||||
| Total |
6,062,119 | 1,339,678 | 414,833 | 6,986,964 | ||||||||||||
| * | The above transactions have been derived using the equity method. |
| c. | Real-Estate Transactions (including rent activities) |
| (1) | Transactions of Real-estate Rent activities |
(units: millions of won)
| Transactions of Payments | ||||||||||||||||||||||
| Quantity | Information | |||||||||||||||||||||
| Rent | Rent | Maturity | Guarantee | |||||||||||||||||||
| Name | Relation | Item | location | Inc | Dec | Inc | Dec | Rent | ||||||||||||||
| Woori Bank |
Affiliate | Rent | Bldg | Hoeihyun- dong 1ga, 203bunji |
— | — | — | — | 2001.3.21 ~ |
3,846 | 1484 | |||||||||||
| Total |
3846 | 1484 | ||||||||||||||||||||
| * | The above contract has extended its’ contract, renewing it on 2003.3.21. |
53
INDEPENDENT ACCOUNTANTS’ REVIEW REPORT
To the Shareholders and Board of Directors of
Woori Finance Holdings Co., Ltd:
We have reviewed the accompanying non-consolidated balance sheet of Woori Finance Holdings Co., Ltd. (the “Company”) as of September 30, 2003 and the related non-consolidated statements of operations and cash flows for the three-month and nine-month periods ended September 30, 2003, all expressed in Korean won. These financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these financial statements based on our review. The non-consolidated statements of operations for the three-month and nine-month periods ended September 30, 2002, which are presented for comparative purposes, were reviewed by Anjin & Co. whose report dated November 12, 2002 stated that nothing had come to their attention that caused them to believe that such non-consolidated statements of income were not presented fairly, in all material respects, in accordance with financial accounting standards in the Republic of Korea.
We conducted our review in accordance with standards for review of interim financial statements in the Republic of Korea. These standards require that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data, and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying non-consolidated financial statements as of and for the three-month and nine-month periods ended September 30, 2003 are not presented fairly, in all material respects, in accordance with accounting principles generally accepted in the Republic of Korea.
We have previously audited the non-consolidated balance sheet of the Company as of December 31, 2002 and the accompanying related non-consolidated statements of income, appropriations of retained earnings and cash flows for the year then ended (not presented herein) in accordance with auditing standards generally accepted in the Republic of Korea and in our report dated March 26, 2003, we expressed an unqualified opinion on those non-consolidated financial statements. The accompanying non-consolidated balance sheet as of December 31, 2002 presented for comparative purposes does not materially differ from the audited non-consolidated balance sheet.
Our review also comprehended the translation of the Korean won amounts into U.S. dollar amounts and nothing has come to our attention that causes us to believe that such translation has not been made in conformity with the basis stated in Note 2 to the accompanying non-consolidated financial statements. Such U.S. dollar amounts are presented solely for the convenience of readers outside of Korea.
WOORI FINANCE HOLDINGS CO., LTD.
NON-CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 2003 AND 2002
TOGETHER WITH INDEPENDENT ACCOUNTANTS’ REVIEW REPORT
Without affecting our conclusion, we draw attention to the following:
As explained in Note 2 to the accompanying non-consolidated financial statements, the Company comparatively presented the balance sheets as of September 30, 2003 and December 31, 2002 and the statements of operations for the three-month and nine-month periods ended September 30, 2003 and 2002. However, the Company presents stand-alone statements of cash flows for the three-month and nine-month periods ended September 30, 2003 in accordance with the transition provision of Statement of Korean Accounting Standards No 2.
As explained in Note 22 to the accompanying non-consolidated financial statements, Woori Bank, a subsidiary of the Company, has loans receivable from and payment guarantees for SK Networks Co., Ltd.(formerly known as “SK Global”) and its overseas subsidiaries (collectively referred to as “SK Networks”) in the total amount of (Won)301 billion (US$262 million). In connection therewith, Woori Bank provided (Won)180 billion (US$156 million) as allowances for credit losses as of September 30, 2003. However, SK Networks is currently undergoing a corporate restructuring and depending on the result of this restructuring, Woori Bank’s actual losses on SK Networks credit may differ materially.
As explained in Note 1 to the accompanying non-consolidated financial statements, Woori Credit Card Co., Ltd. (“WCC”), a subsidiary of the Company, issued new 40,000,000 shares of stock amounting to (Won)200 billion (US$ 174 million) on March 27, 2003 and new 128,000,000 shares of stock amounting to (Won)640 billion (US$556 million) on September 30, 2003 all to the Company. As a result, the number of issued common stock and capital of WCC increased to 402,000,000 shares and (Won)2,013 billion (US$ 1,750 million), respectively, as of September 30, 2003.
As explained in Note 24 to the accompanying non-consolidated financial statements, Woori Bank merged with Woori Investment Bank, a subsidiary of the Company, on July 31, 2003 pursuant to a merger agreement dated June 25, 2003. As a result, Woori Bank took over substantially all of the assets and liabilities of Woori Investment Bank by exchanging one common share of Woori Investment Bank for 0.0355 share of Woori Bank. Accordingly, the number of issued common shares of Woori Bank increased from 553 million to 571 million and contributed capital of Woori Bank increased from (Won)2,764.4 billion (US$2,403 million) to (Won)2,852.8 billion (US$2,480 million).
Accounting principles and review standards and their application in practice vary among countries. The accompanying non-consolidated financial statements are not intended to present the financial position, results of operations or cash flows in accordance with accounting principles and practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying financial statements are for use by those knowledgeable about Korean accounting procedures and review standards and their application in practice.
November 13, 2003
Notice to Readers
This report is effective as of November 13, 2003, the accountants’ review report date. Certain subsequent events or circumstances may have occurred between the accountants’ review report date and the time the accountants’ review report is read. Such events or circumstances could significantly affect the accompanying financial statements and may result in modifications to the accountants’ review report.
WOORI FINANCE HOLDINGS CO., LTD.
NON-CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
(See Independent Accountants’ Review Report)
| Korean won |
US dollars (Note 2) | |||||||||||
| September 30, 2003 |
December 31, 2002 |
September 30, 2003 |
December 31, 2002 | |||||||||
| (In millions) | (In thousands) | |||||||||||
| ASSETS | ||||||||||||
| Cash and bank deposits (Notes 16 and 20) |
(Won) | 290,814 | (Won) | 73,256 | US$ | 252,838 | US$ | 63,690 | ||||
| Investment securities of subsidiaries (Note 3) |
7,157,484 | 6,062,119 | 6,222,817 | 5,270,491 | ||||||||
| Loans, net of allowance for possible loan losses (Notes 4, 5 and 20) |
980,811 | 1,231,207 | 852,731 | 1,070,429 | ||||||||
| Fixed assets (Note 6) |
280 | 374 | 243 | 325 | ||||||||
| Other assets (Notes 7, 11 and 20) |
43,639 | 22,195 | 37,940 | 19,297 | ||||||||
| (Won) | 8,473,028 | (Won) | 7,389,151 | US$ | 7,366,569 | US$ | 6,424,232 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| LIABILITIES |
||||||||||||
| Borrowings (Note 8) |
(Won) | 350,000 | (Won) | 300,000 | US$ | 304,295 | US$ | 260,824 | ||||
| Debentures, net of discounts and reconciliation for conversion rights, and plus added accrued interest and redemption premium (Notes 9 and 11) |
2,293,926 | 1,999,250 | 1,994,371 | 1,738,176 | ||||||||
| Other liabilities (Notes 10, 11, 12 and 20) |
34,814 | 25,772 | 30,268 | 22,407 | ||||||||
| 2,678,740 | 2,325,022 | 2,328,934 | 2,021,407 | |||||||||
| SHAREHOLDERS’ EQUITY |
||||||||||||
| Common stock (Note 13) |
3,877,525 | 3,839,074 | 3,371,175 | 3,337,745 | ||||||||
| Capital surplus (Note 13) |
61,324 | 58,645 | 53,316 | 50,987 | ||||||||
| Retained earnings (Net income of (Won)370,091 million for the nine months ended September 30, 2003 and (Won)589,214 million for the year ended December 31, 2002) |
1,448,635 | 1,145,518 | 1,259,463 | 995,929 | ||||||||
| Capital adjustments (Notes 3 and 14) |
406,804 | 20,892 | 353,681 | 18,164 | ||||||||
| 5,794,288 | 5,064,129 | 5,037,635 | 4,402,825 | |||||||||
| (Won) | 8,473,028 | (Won) | 7,389,151 | US$ | 7,366,569 | US$ | 6,424,232 | |||||
See accompanying notes to non-consolidated financial statements.
WOORI FINANCE HOLDINGS CO., LTD.
NON-CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2003 AND 2002
(See Independent Accountants’ Review Report)
| Korean won |
US dollars (Note 2) |
|||||||||||||||||||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||||||||||||||||||
| Three months ended September 30 |
Nine months ended September 30 |
Three months ended September 30 |
Nine months ended September 30 |
Three months ended September 30 |
Nine months ended September 30 |
Three months ended |
Nine months ended |
|||||||||||||||||||||||||
| (In millions, except for income per share data) | (In thousands, except for income per share data) | |||||||||||||||||||||||||||||||
| OPERATING REVENUE |
||||||||||||||||||||||||||||||||
| Gain on valuation using the equity method of accounting (Note 3) |
(Won) | — | (Won) | 420,371 | (Won) | 164,026 | (Won) | 351,149 | US$ | — | US$ | 365,476 | US$ | 142,607 | US$ | 305,294 | ||||||||||||||||
| Interest income (Note 20) |
16,925 | 54,284 | 13,071 | 40,517 | 14,715 | 47,195 | 11,364 | 35,226 | ||||||||||||||||||||||||
| Gain on valuation of swap contracts (Notes 9 and 20) |
7,805 | 5,296 | 3,500 | 1,338 | 6,786 | 4,604 | 3,043 | 1,163 | ||||||||||||||||||||||||
| Gain on foreign currency translation |
7,892 | 14,895 | — | 15,809 | 6,861 | 12,950 | — | 13,745 | ||||||||||||||||||||||||
| Reversal of allowance for doubtful accounts |
11,161 | 14,934 | — | — | 9,704 | 12,984 | — | — | ||||||||||||||||||||||||
| 43,783 | 509,780 | 180,597 | 408,813 | 38,066 | 443,209 | 157,014 | 355,428 | |||||||||||||||||||||||||
| OPERATING EXPENSES |
||||||||||||||||||||||||||||||||
| Loss on valuation using the equity method of accounting |
(Won) | (129,083 | ) | (Won) | — | (Won) | — | (Won) | — | US$ | (112,227 | ) | US$ | — | US$ | — | US$ | — | ||||||||||||||
| Interest expense (Note 20) |
(33,473 | ) | (103,371 | ) | (25,738 | ) | (78,344 | ) | (29,102 | ) | (89,872 | ) | (22,377 | ) | (68,113 | ) | ||||||||||||||||
| Loss on valuation of swap contracts (Notes 9 and 20) |
(9,165 | ) | (12,082 | ) | (210 | ) | (15,113 | ) | (7,968 | ) | (10,504 | ) | (183 | ) | (13,139 | ) | ||||||||||||||||
| Bad debt expense |
— | — | (90,262 | ) | (90,645 | ) | — | — | (78,475 | ) | (78,808 | ) | ||||||||||||||||||||
| Loss on foreign currency transactions |
— | — | — | (2,016 | ) | — | — | — | (1,753 | ) | ||||||||||||||||||||||
| Loss on foreign currency translation |
(2,409 | ) | (2,409 | ) | (2,618 | ) | — | (2,094 | ) | (2,094 | ) | (2,277 | ) | — | ||||||||||||||||||
| Fees and commissions |
(1,795 | ) | (4,363 | ) | (82 | ) | (2,870 | ) | (1,561 | ) | (3,794 | ) | (71 | ) | (2,496 | ) | ||||||||||||||||
| General and administrative (Notes 17 and 20) |
(4,749 | ) | (17,098 | ) | (2,647 | ) | (15,795 | ) | (4,129 | ) | (14,865 | ) | (2,301 | ) | (13,732 | ) | ||||||||||||||||
| (180,674 | ) | (139,323 | ) | (121,557 | ) | (204,783 | ) | (157,081 | ) | (121,129 | ) | (105,684 | ) | (178,041 | ) | |||||||||||||||||
| OPERATING INCOME (LOSS) |
(136,891 | ) | 370,457 | 59,040 | 204,030 | (119,015 | ) | 322,080 | 51,330 | 177,387 | ||||||||||||||||||||||
| NON-OPERATING INCOME |
— | 190 | 11,448 | 13,494 | — | 165 | 9,953 | 11,731 | ||||||||||||||||||||||||
| NON-OPERATING EXPENSES |
(520 | ) | (556 | ) | (2 | ) | (46 | ) | (452 | ) | (483 | ) | (1 | ) | (40 | ) | ||||||||||||||||
(continued)
WOORI FINANCE HOLDINGS CO., LTD.
NON-CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2003 AND 2002
(See Independent Accountants’ Review Report)
| Korean won |
US dollars (Note 2) | |||||||||||||||||||||||||
| 2003 |
2002 |
2003 |
2002 | |||||||||||||||||||||||
| Three months ended September 30 |
Nine months ended September 30 |
Three months ended September 30 |
Nine months ended September 30 |
Three months ended September 30 |
Nine months ended September 30 |
Three months ended September 30 |
Nine months ended September 30 | |||||||||||||||||||
| (In millions, except for income per common share data) |
(In thousands, except for income per common share data) | |||||||||||||||||||||||||
| INCOME (LOSS) BEFORE INCOME TAX EXPENSE |
(Won) | (137,411 | ) | (Won) | 370,091 | (Won) | 70,486 | (Won) | 217,478, | US$ | (119,467 | ) | US$ | 321,762 | US$ | 61,282 | US$ | 189,078 | ||||||||
| INCOME TAX EXPENSE (Note 15) |
— | — | — | — | — | — | — | — | ||||||||||||||||||
| NET INCOME (LOSS) |
(Won) | (137,411 | ) | (Won) | 370,091 | (Won) | 70,486 | (Won) | 217,478 | US$ | (119,467 | ) | US$ | 321,762 | US$ | 61,282 | US$ | 189,078 | ||||||||
| BASIC ORDINARY INCOME (LOSS) PER COMMON SHARE (Note 21) |
(Won) | (177 | ) | (Won) | 480 | (Won) | 92 | (Won) | 293 | US$ | (0.154 | ) | US$ | 0.417 | US$ | 0.080 | US$ | 0.255 | ||||||||
| BASIC NET INCOME (LOSS) PER COMMON SHARE (Note 21) |
(Won) | (177 | ) | (Won) | 480 | (Won) | 92 | (Won) | 293 | US$ | (0.154 | ) | US$ | 0.417 | US$ | 0.080 | US$ | 0.255 | ||||||||
| DILUTED ORDINARY INCOME (LOSS) PER COMMON SHARE (Note 21) |
(Won) | (177 | ) | (Won) | 468 | (Won) | 91 | (Won) | 292 | US$ | (0.154 | ) | US$ | 0.407 | US$ | 0.079 | US$ | 0.254 | ||||||||
| DILUTED NET INCOME (LOSS) PER COMMON SHARE (Note 21) |
(Won) | (177 | ) | (Won) | 468 | (Won) | 91 | (Won) | 292 | US$ | (0.154 | ) | US$ | 0.407 | US$ | 0.079 | US$ | 0.254 | ||||||||
See accompanying notes to non-consolidated financial statements.
WOORI FINANCE HOLDINGS CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30,2003
(See Independent Accountants’ Review Report)
| Korean won |
US dollars (Note 2) |
|||||||||||||||
| Three months ended September 30 |
Nine months ended September 30 |
Three months ended September 30 |
Nine months ended September 30 |
|||||||||||||
| (In millions) | (In thousands) | |||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||||||||||
| Net income (loss) |
(Won) | (137,411 | ) | (Won) | 370,091 | US$ | (119,467 | ) | US$ | 321,762 | ||||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
||||||||||||||||
| Interest expense (amortization of discounts on debentures) |
2,937 | 8,155 | 2,554 | 7,090 | ||||||||||||
| Loss on valuation of swap contracts |
9,165 | 12,082 | 7,968 | 10,504 | ||||||||||||
| Loss on foreign currency translation |
2,409 | 2,409 | 2,094 | 2,094 | ||||||||||||
| Provision for severance benefits |
20 | 287 | 17 | 250 | ||||||||||||
| Depreciation |
35 | 105 | 30 | 91 | ||||||||||||
| Amortization on intangible assets |
3 | 10 | 3 | 9 | ||||||||||||
| Stock compensation |
117 | 351 | 102 | 305 | ||||||||||||
| Loss (gain) on valuation using the equity method of accounting |
129,083 | (420,371 | ) | 112,227 | (365,476 | ) | ||||||||||
| Long-term accrued interest income |
(6,690 | ) | (19,659 | ) | (5,816 | ) | (17,092 | ) | ||||||||
| Gain on valuation of swap contracts |
(7,805 | ) | (5,296 | ) | (6,786 | ) | (4,604 | ) | ||||||||
| Gain on foreign currency translation |
(7,892 | ) | (14,895 | ) | (6,861 | ) | (12,950 | ) | ||||||||
| Reversal of allowance for doubtful accounts |
(11,161 | ) | (14,934 | ) | (9,704 | ) | (12,984 | ) | ||||||||
| 110,221 | (451,756 | ) | 95,828 | (392,763 | ) | |||||||||||
| Changes in operating assets and liabilities: |
||||||||||||||||
| Decrease (increase) in other assets |
(1,214 | ) | 4,260 | (1,055 | ) | 3,704 | ||||||||||
| Decrease in other liabilities |
(3,507 | ) | (3,326 | ) | (3,050 | ) | (2,892 | ) | ||||||||
| (4,721 | ) | 934 | (4,105 | ) | 812 | |||||||||||
| Net cash used in operating activities |
(31,911 | ) | (80,731 | ) | (27,744 | ) | (70,189 | ) | ||||||||
(continued)
WOORI FINANCE HOLDINGS CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE THREE–MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2003
(See Independent Accountants’ Review Report)
| Korean won |
US dollars (Note 2) |
|||||||||||||||
| Three months ended September 30 |
Nine months ended September 30 |
Three months ended |
Nine months ended September 30 |
|||||||||||||
| (In millions) | (In thousands) | |||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||||||||||
| Dividend income |
(Won) | 386,381 | (Won) | 539,989 | US$ | 335,925 | US$ | 469,474 | ||||||||
| Collection of loans |
19,200 | 29,600 | 16,693 | 25,735 | ||||||||||||
| Collection of other loans |
65,411 | 357,697 | 56,869 | 310,987 | ||||||||||||
| Acquisition of investment securities of subsidiaries |
(640,000 | ) | (840,000 | ) | (556,425 | ) | (730,308 | ) | ||||||||
| Increase in loans |
(31,850 | ) | (121,850 | ) | (27,691 | ) | (105,938 | ) | ||||||||
| Acquisition of fixed assets |
— | (21 | ) | — | (19 | ) | ||||||||||
| Net cash used in investing activities |
(200,858 | ) | (34,585 | ) | (174,629 | ) | (30,069 | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||||||||||
| Increase in borrowings |
150,000 | 150,000 | 130,412 | 130,412 | ||||||||||||
| Proceeds from debentures in local currency |
299,128 | 319,128 | 260,066 | 277,454 | ||||||||||||
| Proceeds from debentures in foreign currencies |
1,179 | 49,812 | 1,025 | 43,307 | ||||||||||||
| Capital increase with consideration |
— | 38,450 | — | 33,420 | ||||||||||||
| Payment of borrowings |
— | (100,000 | ) | — | (86,941 | ) | ||||||||||
| Payment of debentures in local currency |
(66,680 | ) | (66,680 | ) | (57,972 | ) | (57,973 | ) | ||||||||
| Decrease in capital surplus |
(544 | ) | (574 | ) | (473 | ) | (499 | ) | ||||||||
| Payment of dividends |
— | (57,262 | ) | — | (49,784 | ) | ||||||||||
| Net cash provided by financing activities |
383,083 | 332,874 | 333,058 | 289,406 | ||||||||||||
| NET INCREASE IN CASH AND BANK DEPOSITS |
150,314 | 217,558 | 130,685 | 189,148 | ||||||||||||
| CASH AND BANK DEPOSITS, BEGINNING OF THE PERIOD |
140,500 | 73,256 | 122,153 | 63,690 | ||||||||||||
| CASH AND BANK DEPOSITS, END OF THE PERIOD (Note 16) |
(Won) | 290,814 | (Won) | 290,814 | US$ | 252,838 | US$ | 252,838 | ||||||||
See accompanying notes to non-consolidated financial statements.
WOORI FINANCE HOLDINGS CO., LTD.
NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2003 AND 2002
(See Independent Accountants’ Review Report)
| 1. | GENERAL: |
| (1) | Woori Finance Holdings Co., Ltd. |
Woori Finance Holdings Co., Ltd. (the “Company”) was incorporated on March 27, 2001, to engage in the business of managing the five financial institutions, Woori Bank (formerly Hanvit Bank), Kyongnam Bank, Kwangju Bank, Woori Credit Card Co., Ltd. (formerly Peace Bank of Korea) and Woori Investment Bank (hereafter collectively referred to as the “Five Subsidiaries”), whose shares were contributed to the Company by the Korea Deposit Insurance Corporation (the “KDIC”) in accordance with the provisions of the Financial Holding Company Act. In accordance with its functional restructuring, the Company established or acquired seven more subsidiaries, and has four 2nd -tier subsidiaries. Upon incorporation, the Company’s common stock amounted to (Won)3,637,293 million (US$3,162,314 thousand), consisting of 727,458,609 common shares ((Won)5,000 per share) issued and outstanding. However, as a result of several capital increases and exercise of warrants since incorporation, the Company’s common stock amounted to (Won)3,877,525 million (US$3,371,175 thousand), consisting of 775,504,910 common shares issued and outstanding as of September 30, 2003. On June 24, 2002, the Company listed its common shares on the Korea Stock Exchange through a public offering at a price of (Won)6,800 per share with 36,000,000 new shares and 54,000,000 issued shares. The KDIC owned 673,458,609 (86.8%) shares of the Company’s common shares as of September 30, 2003.
| (2) | Subsidiaries |
General information pertaining to the Company’s subsidiaries is as follows:
Woori Bank (formerly Hanvit Bank) was established in 1899 and is engaged in the commercial banking business under the Korean Banking Law, trust business under the Trust Business Law, merchant bank services under the Merchant Bank Act, and foreign exchange business with approval from the Bank of Korea (the “BOK”) and the Ministry of Finance and Economy (the “MOFE”). In connection with the infusion of public funds, Woori Bank and the KDIC have entered into the Agreement on the Implementation of the Business Plan. Woori Bank changed its name from Hanvit Bank to Woori Bank on May 20, 2002. Its common stock amounted to (Won)2,764,400 million (US$2,403,408 thousand) consisting of 552,880,000 common shares issued and outstanding as of September 30, 2003. Woori Bank is wholly owned by the Company. The head office of Woori Bank is located in Seoul, Korea. Woori Bank has 685 branches and offices in Korea and 11 branches and offices in overseas.
Kyongnam Bank was incorporated on April 18, 1970 and is engaged in the commercial banking business under the Korean Banking Law, trust business under the Trust Business Law, and foreign exchange business with approval from the BOK and the MOFE. In connection with the infusion of public funds, Kyongnam Bank and the KDIC have entered into the Agreement on the Implementation of the Business Plan. As of September 30, 2003, Kyongnam Bank’s common stock amounted to (Won)259,000 million (US$225,178 thousand) consisting of 51,800,043 shares of common stock issued and outstanding of which the Company owns 99.99%. The head office of Kyongnam Bank is located in Masan, Korea. Kyongnam Bank has 128 branches and offices in Korea.
Kwangju Bank was established on October 7, 1968 and is engaged in the commercial banking business under the Korean Banking Law, trust business under the Trust Business Law, and foreign exchange business with approval from the BOK and the MOFE. In connection with the infusion of public funds, Kwangju Bank and the KDIC have entered into the Agreement on the Implementation of the Business Plan. As of September 30, 2003, its common stock amounted to (Won)170,403 million (US$148,151 thousand) consisting of 34,080,517 common shares issued and outstanding of which the Company owns 99.99%. Kwangju Bank’s head office is located in Kwangju City, Korea and has 113 domestic branches and offices in Korea.
Woori Credit Card Co., Ltd. (“WCC”, formerly Peace Bank of Korea) was established on November 6, 1991 to engage in the commercial banking business under the Korean Banking Law, trust business under the Trust Business Law, and foreign exchange business with approval from the BOK and the MOFE. On December 17, 2001, WCC changed its name from Peace Bank of Korea to Woori Credit Card Co., Ltd. and is engaged in the credit card business, factoring and other financing services. Pursuant to the business transfer agreement entered into between Woori Bank and WCC dated December 26, 2001, the banking business segment (including trust accounts) of WCC was merged with Woori Bank as of December 31, 2001. WCC acquired the credit card subscriber base of Woori Bank on January 31, 2002. In connection with the infusion of public funds, WCC and the KDIC have entered into the Agreement on the Implementation of the Business Plan. WCC has issued new 40,000,000 shares of stock amounting to (Won)200 billion (US$ 174 million ) on March 28, 2003 and new 128,000,000 shares of stock amounting to (Won)640 billion (US$556 million) on September 30, 2003 all to the Company. As a result, the WCC’s the number of issued common stock and capital increased to 402,600,000 shares and (Won)2,013 billion (US$1,750million), respectively, as of September 30, 2003 which are entirely owned by the Company. The head office of WCC is located in Seoul, Korea.
Woori Investment Bank (“WIB”, formerly Hanaro Investment Bank) was established on November 3, 2000 with an initial capital of (Won)30,000 million (US$26,082 thousand; 6,000,000 common shares issued), which was provided by the KDIC. On November 10, 2000, it started its merchant bank services upon obtaining approval from the Financial Supervisory Commission. As of November 21, 2000, in accordance with the Financial Supervisory Commission’s directive, WIB took over (Won)2,490.2 billion (US$2,165 million) of assets and (Won)5,462.9 billion (US$4,750 million) of liabilities from four merchant banks (Yeungnam Merchant Banking Corp., Central Banking Corp., Korea Merchant Banking Corp. and H&S Investment Bank Corp.) considered as distressed financial institutions. WIB was merged into Woori Bank as of July 31, 2003.
Woori Finance Information System Co., Ltd. (“WFIS”, formerly Hanviteun System) was established on April 17, 1989 and is engaged in the business of installing computerized financial systems. On September 29, 2001, the Company purchased all of the common stock of WFIS from Woori Bank in accordance with the group’s functional restructuring, making WFIS a subsidiary of the Company. On October 15, 2001, WFIS changed its name from Hanviteun System Co., Ltd. to Woori Finance Information System Co., Ltd. As of September 30, 2003, its common stock amounted to (Won)4,500 million (US$3,912 thousand) consisting of 900,000 shares issued and outstanding all of which are owned by the Company. The office of WFIS is located in Seoul, Korea.
Woori F&I Co., Ltd. (“WF&I”, formerly Woori Asset Management Co., Ltd. (“WAMC”)) was established on November 16, 2001 to engage in the business of management, operation, and disposition of securitization assets. On September 13, 2002, WF&I split off the asset management business segment and established Woori CA Asset Management Co., Ltd. (“WCAAMC”). As a result, WF&I is engaged in the business of acquisition and disposition of securities issued by asset securitization specialty corporations, established based on the Act on Asset-Backed Securitization for the purpose of non-performing assets securitization, and in the business of acquisition and disposition of equity of asset management corporations, which are established for the purpose of non-performing assets management. On September 16, 2002, WF&I changed its name from Woori Asset Management Co., Ltd. to Woori F&I Co., Ltd. As of September 30, 2003, its common stock amounted to (Won)10,000 million (US$8,694 thousand) consisting of 2,000,000 shares issued and outstanding all of which are owned by the Company. The office of WF&I is located in Seoul, Korea.
Woori First Asset Securitization Specialty Co., Ltd. (“WASS1”) was established on November 16, 2001 under the Act on Asset-Backed Securitization of the Republic of Korea as a special purpose company. WASS1 is engaged in the business of management, operation, and disposition of the securitization assets and issuance of asset-backed securities based on the securitization assets acquired from Woori Bank, WCC, Kyongnam Bank, Kwangju Bank and WIB. WASS1 changed its contractor in connection with the asset management and other activities from WF&I to WCAAMC as of September 14, 2002 due to the split off of WCAAMC from WAMC as explained above. As of September 30, 2003, its common stock amounted to (Won)10 million (US$9 thousand) consisting of 2,000 shares issued and outstanding of which the Company owns 95%. A resolution was made to dissolve WASS1 on September 30, 2003.
- 2 -
Woori Second Asset Securitization Specialty Co., Ltd. (“WASS2”) was established on December 22, 2001 under the Act on Asset-Backed Securitization of the Republic of Korea as a special purpose company. WASS2 is engaged in the business of management, operation, and disposition of the securitization assets and issuance of asset-backed securities based on the securitization assets acquired from WCC. WASS2 changed its contractor in connection with the asset management and other activities from WF&I to WCAAMC as of September 14, 2002 due to the split off of WCAAMC from WAMC as explained above. As of September 30, 2003, its common stock amounted to (Won)10 million (US$9 thousand) consisting of 2,000 shares issued and outstanding of which the Company owns 95%.
Woori Third Asset Securitization Specialty Co., Ltd. (“WASS3”) was established on March 15, 2002 under the Act on Asset-Backed Securitization of the Republic of Korea as a special purpose company. WASS3 is engaged in the business of management, operation, and disposition of the securitization assets and issuance of asset-backed securities based on the securitization assets acquired from Woori Bank, Kyongnam Bank and WCC. WASS3 changed its contractor in connection with the asset management and other activities from WF&I to WCAAMC as of September 14, 2002 due to the split off of WCAAMC from WAMC as explained above. As of September 30, 2003, its common stock amounted to (Won)10 million (US$9 thousand) consisting of 2,000 shares issued and outstanding all of which are owned by the Company.
Woori Investment Trust Management Co., Ltd. (“WITM”, formerly Hanvit Investment Trust Management Co., Ltd.) was established on June 24, 1988 and is engaged in the investment trust business under the Investment Trust Business Law with approval from the MOFE. In connection with the functional restructuring, on March 29, 2002, the Company purchased the entire common stock of WITM from Woori Bank, making WITM a subsidiary of the Company. On May 17, 2002, WITM changed its name from Hanvit Investment Trust Management Co., Ltd. to Woori Investment Trust Management Co., Ltd. As of September 30, 2003, its common stock amounted to (Won)30,000 million (US$26,082 thousand) consisting of 6,000,000 shares issued and outstanding all of which are owned by the Company. The office of WITM is located in Seoul, Korea.
Woori Securities Co., Ltd. (“Woori Securities”, formerly Hanvit Securities Co., Ltd.) was established on August 26, 1954 to engage mainly in trading, agency, brokerage, and underwriting of securities and listed its shares on the Korea Stock Exchange on July 26, 1988. In connection with the functional restructuring, as of July 29, 2002, the Company acquired 40.2% (13,250,570 shares) of common stocks of Woori Securities from Woori Bank, making Woori Securities a subsidiary of the Company. On June 1, 2002, Woori Securities changed its name from Hanvit Securities Co., Ltd. to Woori Securities Co., Ltd. As of September 30, 2003, its common stock amounted to (Won)164,782 million (US$143,264 thousand) consisting of 32,956,413 shares issued and outstanding of which the Company owns 40.2%. The head office of Woori Securities is located in Seoul, Korea. Woori Securities has 62 branches and offices in Korea.
| (3) | 2nd -tier Subsidiaries |
General information pertaining to the Company’s 2nd -tier subsidiaries is as follows:
Woori Credit Information Co., Ltd. (“WCI”, formerly Hanvit Credit Information Co., Ltd.) was established on March 15, 1991 and is engaged in the credit investigation business and credit collection business under the Act on Use and Protection of Credit Information of the Republic of Korea. On June 1, 2002, WCI changed its name from Hanvit Credit Information Co., Ltd. to Woori Credit Information Co., Ltd. As of September 30, 2003, the common stock of WCI amounted to (Won)5,040 million (US$4,382 thousand) consisting of 1,008,000 shares issued and outstanding, and is wholly owned by Woori Bank. The head office of WCI is located in Seoul, Korea. WCI has 6 branches and offices in Korea.
Woori America Bank (“WAB”, formerly Hanvit America Bank) was established on January 7, 1984 and is engaged in the banking business in New York, U.S.A. On May 20, 2002, WAB changed its name from Hanvit America Bank to Woori America Bank. As of September 30, 2003, its common stock amounted to US$42,500 thousand consisting of 8,500,000 shares issued and outstanding and is wholly owned by Woori Bank.
PT. Bank Woori Indonesia (“BWI”, formerly P.T. Bank Hanvit Indonesia) was established on June 18, 1992 and is engaged in the banking business in Indonesia. BWI changed its name from P.T. Bank Hanvit Indonesia to PT. Bank Woori Indonesia on May 20, 2002. As of September 30, 2003, its common stock amounted to IDR 170,000 million consisting of 1,700 shares issued and outstanding of which Woori Bank owns 81.6%.
- 3 -
Woori CA Asset Management Co., Ltd. (“WCAAMC”) was established on September 14, 2002 as an asset management company for asset securitization specialty companies established based on the Act on Asset-Backed Securitization and is engaged in the business of management, operation, and disposition of securitization assets. WCAAMC was established through split-off from WF&I in accordance with the Joint Venture Agreement entered into by the Company and Lehman Brothers Luxembourg Investment S.a.r.l. (“LB Luxembourg”). In addition, it took over the asset management and operation contracts from WAMC and therefore, is engaged in managing and operating the assets of WASS1, WASS2, WASS3, and Woori LB First Ÿ Second Ÿ Third Ÿ Fourth Ÿ Fifth Ÿ Sixth Ÿ Seventh Asset Securitization Specialty Co., Ltds. As of September 30, 2003, WCAAMC’s common stock amounted to (Won)4,000 million (US$3,478 thousand) consisting of 800,000 shares issued and outstanding of which WF&I and LB Luxembourg own 51% and 49%, respectively. The office of WCAAMC is located in Seoul, Korea.
| (4) | The summary of subsidiaries as of September 30, 2003 is as follows: |
| Parent companies |
Subsidiaries |
Number of shares owned |
Percentage of owner- |
Fiscal year end | ||||
| Woori Finance Holdings Co., Ltd. |
Woori Bank (*1) | 570,567,520 | 100.0 | December 31 | ||||
| ” |
Kyongnam Bank | 51,800,000 | 99.9 | December 31 | ||||
| ” |
Kwangju Bank | 34,080,000 | 99.9 | December 31 | ||||
| ” |
Woori Credit Card Co., Ltd. (*2) | 402,600,000 | 100.0 | December 31 | ||||
| ” |
Woori Finance Information System Co., Ltd. | 900,000 | 100.0 | December 31 | ||||
| ” |
Woori F&I Co., Ltd. | 2,000,000 | 100.0 | December 31 | ||||
| ” |
Woori First Asset Securitization Specialty Co., Ltd | 1,900 | 95.0 | December 31 | ||||
| ” |
Woori Second Asset Securitization Specialty Co., Ltd. | 1,900 | 95.0 | December 31 | ||||
| ” |
Woori Third Asset Securitization Specialty Co., Ltd. | 2,000 | 100.0 | December 31 | ||||
| ” |
Woori Investment Trust Management Co., Ltd. | 6,000,000 | 100.0 | March 31 | ||||
| ” |
Woori Securities Co., Ltd. | 13,250,570 | 40.2 | March 31 | ||||
| Woori Bank |
Woori Credit Information Co., Ltd. | 1,008,000 | 100.0 | December 31 | ||||
| ” |
Woori America Bank | 8,500,000 | 100.0 | December 31 | ||||
| ” |
PT. Bank Woori Indonesia | 1,387 | 81.6 | December 31 | ||||
| Woori F&I Co., Ltd. |
Woori CA Asset Management Co., Ltd. | 408,000 | 51.0 | December 31 |
| (*1) | The number of outstanding shares of Woori Bank increased by 17,687,520 shares as the result of Woori Bank’s merge with Woori Investment Bank on July 31, 2003. |
| (*2) | On March 27, 2003 and September 30, 2003, the Company purchased 40,000,000 new shares of WCC for (Won)200,000 million (US$173,883 thousand) and 128,000,000 new shares of WCC for (Won)640,000 million (US$556,425 thousand), respectively. |
- 4 -
The summary of subsidiaries as of December 31, 2002 was summarized as follows:
| Parent companies |
Subsidiaries |
Number of shares owned |
Percentage of owner- ship(%) |
Fiscal year end | ||||
| Woori Finance Holdings Co., Ltd. |
Woori Bank (*1) | 552,880,000 | 100.0 | December 31 | ||||
| ” |
Kyongnam Bank | 51,800,000 | 99.9 | December 31 | ||||
| ” |
Kwangju Bank | 34,080,000 | 99.9 | December 31 | ||||
| ” |
Woori Credit Card Co., Ltd. | 234,600,000 | 100.0 | December 31 | ||||
| ” |
Woori Investment Bank (*1) | 498,240,000 | 100.0 | March 31 | ||||
| ” |
Woori Finance Information System Co., Ltd. (*2) | 900,000 | 100.0 | December 31 | ||||
| ” |
Woori F&I Co., Ltd. | 2,000,000 | 100.0 | December 31 | ||||
| ” |
Woori First Asset Securitization Specialty Co., Ltd | 1,900 | 95.0 | December 31 | ||||
| ” |
Woori Second Asset Securitization Specialty Co., Ltd. | 1,900 | 95.0 | December 31 | ||||
| ” |
Woori Third Asset Securitization Specialty Co., Ltd. | 2,000 | 100.0 | December 31 | ||||
| ” |
Woori Investment Trust Management Co., Ltd. | 6,000,000 | 100.0 | March 31 | ||||
| ” |
Woori Securities Co., Ltd. | 13,250,570 | 40.2 | March 31 | ||||
| Woori Bank |
Woori Credit Information Co., Ltd. | 1,008,000 | 100.0 | December 31 | ||||
| ” |
Woori America Bank | 7,000,000 | 100.0 | December 31 | ||||
| ” |
P.T. Bank Woori Indonesia | 1,387 | 81.6 | December 31 | ||||
| Woori F&I Co., Ltd. |
Woori CA Asset Management Co., Ltd. | 408,000 | 51.0 | December 31 |
| (*1) | WIB was merged into Woori Bank on July 31, 2003. |
| (*2) | WFIS changed its fiscal year end from March 31 to December 31 in 2002. |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: |
Basis of Financial Statement Presentation
The Company maintains its official accounting records in Korean won and prepares statutory non-consolidated financial statements in the Korean language (Hangul) in conformity with financial accounting standards and accounting standards for financial holding companies in the Republic of Korea. Certain financial accounting standards applied by the Company that conform with those generally accepted in the Republic of Korea may not conform with generally accepted accounting principles in other countries. Accordingly, the accompanying financial statements are intended for use by those who are informed about Korean accounting principles and practices. The accompanying financial statements have been restructured and translated into English from the Korean language financial statements.
The US dollar amounts presented in these financial statements were computed by translating Korean won into US dollars at the rate of (Won)1,150.2 to US$1.00 the Base Rate announced by the Korean Financial Telecommunications & Clearing Institute at September 30, 2003, solely for the convenience of the reader. This convenience translation into US dollars should not be construed as representations that the Korean won amounts have been, could have been, or could in the future be, converted at this or any other rate of exchange.
The accounting policies, which have been adopted in preparing the accompanying non-consolidated interim financial statements, except for the matters set forth below, are not different materially from those used in preparing the non-consolidated financial statements for the year ended December 31, 2002.
- 5 -
Statement of Korea Accounting Standards (“SKAS”)
Korea Accounting Standards Board (“KASB”) has issued SKASs that replaced existing Korean Financial Accounting Standards (“KFAS”) in order to enhance the global convergence of existing accounting standards and usefulness of accounting information. Accordingly, the Company has adopted SKASs since this fiscal year of 2003.
SKAS No. 2 – “Interim Financial Reporting”
SKAS No. 2 – “Interim Financial Reporting” requires that interim financial statements should comparatively present the balance sheets and the statements of income and cash flows. However, the stand-alone statements of cash flows for the three-month and nine-month periods ended September 30, 2003 are presented in accordance with the transition provision of the SKAS No. 2.
SKAS No. 9 – “Convertible Securities”
Korea Accounting Standards Board (“KASB”) issued SKAS No. 9 -”Convertible Securities”, which revised the accounting and reporting for convertible securities. The statement requires recognizing the value of convertible rights when convertible bonds are issued. SKAS No. 9 is effective for the fiscal year beginning after December 31, 2002. Accordingly, the Company recognized the consideration for convertible rights by computing issuance price of the convertible bonds less the market price of straight bonds as of the issuance date of the convertible bonds. The consideration for convertible rights is recorded on other capital surplus when the bonds are issued and it will be credited to additional paid-in capital if the right is exercised. Reconciliation for convertible rights is presented as a deduction from the bonds and the redemption premium, if any, is added to the debentures. However, in accordance with SKAS No. 9, the convertible bonds issued before December 31, 2002 are reported in accordance with the previous accounting standards for convertible bonds.
| 3. | INVESTMENT SECURITIES OF SUBSIDIARIES: |
| (1) | Changes in equity securities for the nine months ended September 30, 2003, which are accounted for using the equity method of accounting, are as follows (Unit: Korean won in millions): |
| Beginning balance |
Gain (loss) on valuation using the equity method |
Capital adjust- ments |
Other increase (decrease) |
Ending balance | ||||||||||||||
| Woori Bank |
(Won) | 4,500,143 | (Won) | 1,147,436 | (Won) | 329,841 | (Won) | (268,727 | ) | (Won) | 5,708,693 | |||||||
| Kyongnam Bank |
424,060 | 83,403 | 4,325 | (5,180 | ) | 506,608 | ||||||||||||
| Kwangju Bank |
290,003 | 63,678 | 25,038 | (3,439 | ) | 375,280 | ||||||||||||
| Woori Credit Card |
379,126 | (893,447 | ) | (17,268 | ) | 840,000 | 308,411 | |||||||||||
| Woori Investment Bank |
222,936 | 7,390 | 19,340 | (249,666 | ) | — | ||||||||||||
| Woori Finance Information System |
3,364 | 3,712 | — | — | 7,076 | |||||||||||||
| Woori F&I |
17,016 | 10,873 | 4,473 | (1,500 | ) | 30,862 | ||||||||||||
| Woori Second Asset Securitization Specialty |
31,666 | 1,594 | — | — | 33,260 | |||||||||||||
| Woori Third Asset Securitization Specialty |
— | (1,888 | ) | 18,992 | (9,889 | ) | 7,215 | |||||||||||
| Woori Investment Trust Management |
39,646 | 1,231 | — | (6,000 | ) | 34,877 | ||||||||||||
| Woori Securities |
154,159 | (3,611 | ) | (46 | ) | (5,300 | ) | 145,202 | ||||||||||
| (Won) | 6,062,119 | (Won) | 420,371 | (Won) | 384,695 | (Won) | 290,299 | (Won) | 7,157,484 | |||||||||
- 6 -
The differences between the acquisition cost and the balance as of December 31, 2002 are summarized as follows (Unit: Korean won in millions):
| Acquisition cost |
Gain (loss) on valuation using the equity method |
Capital adjust- ments |
Other increase (decrease) |
Balance as of 31, 2002 | ||||||||||||||
| Woori Bank |
(Won) | 2,764,400 | (Won) | 1,439,942 | (Won) | 484,040 | (Won) | (188,239 | ) | (Won) | 4,500,143 | |||||||
| Kyongnam Bank |
259,000 | 150,565 | 31,163 | (16,668 | ) | 424,060 | ||||||||||||
| Kwangju Bank |
170,403 | 139,251 | (12,506 | ) | (7,145 | ) | 290,003 | |||||||||||
| Woori Credit Card |
273,000 | (301,298 | ) | (492,576 | ) | 900,000 | 379,126 | |||||||||||
| Woori Investment Bank |
170,493 | 37,390 | 15,286 | (233 | ) | 222,936 | ||||||||||||
| Woori Finance Information System |
5,244 | (1,676 | ) | — | (204 | ) | 3,364 | |||||||||||
| Woori F&I |
10,094 | 6,956 | (34 | ) | — | 17,016 | ||||||||||||
| Woori First Asset Securitization Specialty |
10 | (10 | ) | — | — | — | ||||||||||||
| Woori Second Asset Securitization Specialty |
10 | 31,656 | — | — | 31,666 | |||||||||||||
| Woori Third Asset Securitization Specialty |
10 | (10 | ) | — | — | — | ||||||||||||
| Woori Investment Trust Management |
39,128 | 2,018 | — | (1,500 | ) | 39,646 | ||||||||||||
| Woori Securities |
152,662 | 6,114 | (4,617 | ) | — | 154,159 | ||||||||||||
| (Won) | 3,844,454 | (Won) | 1,510,898 | (Won) | 20,756 | (Won) | 686,011 | (Won) | 6,062,119 | |||||||||
| (2) | Of the valuation of the investment securities using the equity method, the details of other increase or decrease during the nine-month period ended September 30, 2003 are as follows (Unit: Korean won in millions): |
| Acquisition (disposition) amount |
Retained earnings |
Dividends received |
Total |
|||||||||||||
| Woori Bank (*1) |
(Won) | 249,666 | (Won) | 208 | (Won) | (518,601 | ) | (Won) | (268,727 | ) | ||||||
| Kyongnam Bank |
— | — | (5,180 | ) | (5,180 | ) | ||||||||||
| Kwangju Bank |
— | (31 | ) | (3,408 | ) | (3,439 | ) | |||||||||
| Woori Credit Card Co., Ltd. |
840,000 | — | — | 840,000 | ||||||||||||
| Woori Investment Bank (*1) |
(249,666 | ) | — | — | (249,666 | ) | ||||||||||
| Woori F&I Co., Ltd. |
— | — | (1,500 | ) | (1,500 | ) | ||||||||||
| Woori Third Asset Securitization Specialty Co., Ltd. |
— | (9,889 | ) | — | (9,889 | ) | ||||||||||
| Woori Investment Trust Management |
— | — | (6,000 | ) | (6,000 | ) | ||||||||||
| Woori Securities Co., Ltd. |
— | — | (5,300 | ) | (5,300 | ) | ||||||||||
| (Won) | 840,000 | (Won) | (9,712 | ) | (Won) | (539,989 | ) | (Won) | 290,299 | |||||||
| (*1) | The investment securities in WIB were combined with the investment securities in Woori Bank, as WIB was merged into Woori Bank. |
- 7 -
The details of other increase or decrease during the period from the acquisitions of the securities to December 31, 2002 are as follows (Unit: Korean won in millions):
| Acquisition (disposition) amount |
Retained earnings |
Dividends received |
Total |
|||||||||||||
| Woori Bank (*1) |
(Won) | (22,582 | ) | (Won) | (110,369 | ) | (Won) | (55,288 | ) | (Won) | (188,239 | ) | ||||
| Kyongnam Bank |
— | (11,488 | ) | (5,180 | ) | (16,668 | ) | |||||||||
| Kwangju Bank |
— | (3,737 | ) | (3,408 | ) | (7,145 | ) | |||||||||
| Woori Credit Card Co., Ltd. |
900,000 | — | — | 900,000 | ||||||||||||
| Woori Investment Bank |
— | (233 | ) | — | (233 | ) | ||||||||||
| Woori Finance Information System Co., Ltd. |
— | (204 | ) | — | (204 | ) | ||||||||||
| Woori Investment Trust Management Co., Ltd. |
— | — | (1,500 | ) | (1,500 | ) | ||||||||||
| (Won) | 877,418 | (Won) | (126,031 | ) | (Won) | (65,376 | ) | (Won) | 686,011 | |||||||
| (*1) | Woori Bank recorded a gain on disposition of the investment securities from WITM amounting to (Won)17,715 million (US$15,402 thousand) and a loss on disposition of the investment securities from Woori Securities amounting to (Won)40,297 million (US$35,035 thousand) which were recorded in capital surplus of Woori Bank. The Company recognized these amounts as increase and decrease, respectively, in acquisition cost of the investment securities in Woori Bank. |
| (3) | For investments in the subsidiaries accounted for using the equity method, the difference between the acquisition cost and the net asset value on the acquisition date is amortized using the straight-line method over 20 years. |
The details of changes in the difference between the acquisition cost and the net asset value on the acquisition date during the nine-month period ended September 30, 2003 are as follows (Unit: Korean won in millions):
| Beginning balance |
Increase (decrease) |
Amortization |
Ending balance |
|||||||||||||
| Woori Bank |
(Won) | 274,097 | (Won) | 5,282 | (Won) | 11,471 | (Won) | 267,908 | ||||||||
| Kyongnam Bank |
8,010 | — | 334 | 7,676 | ||||||||||||
| Kwangju Bank |
17,409 | — | 725 | 16,684 | ||||||||||||
| Woori Credit Card Co., Ltd. |
25,850 | — | 1,077 | 24,773 | ||||||||||||
| Woori Investment Bank |
5,456 | (5,282 | ) | 174 | — | |||||||||||
| Woori Finance Information System Co., Ltd. |
(37 | ) | — | (28 | ) | (9 | ) | |||||||||
| Woori F&I Co., Ltd. |
89 | — | 4 | 85 | ||||||||||||
| Woori Securities Co., Ltd. |
237 | — | 177 | 60 | ||||||||||||
| (Won) | 331,111 | (Won) | — | (Won) | 13,934 | (Won) | 317,177 | |||||||||
The details of changes in the difference between the acquisition cost and net asset value on the acquisition date during the period from the acquisitions to December 31, 2002 are as follows (Unit: Korean won in millions):
| The initial difference at acquisition |
Increase (decrease) |
Amortization |
Balance as of Dec. 31, 2002 |
|||||||||||||
| Woori Bank |
(Won) | 328,323 | (Won) | (22,582 | ) | (Won) | 31,644 | (Won) | 274,097 | |||||||
| Kyongnam Bank |
8,900 | — | 890 | 8,010 | ||||||||||||
| Kwangju Bank |
19,343 | — | 1,934 | 17,409 | ||||||||||||
| Woori Credit Card Co., Ltd. |
28,721 | — | 2,871 | 25,850 | ||||||||||||
| Woori Investment Bank |
5,979 | — | 523 | 5,456 | ||||||||||||
| Woori Finance Information System Co., Ltd. |
(110 | ) | — | (73 | ) | (37 | ) | |||||||||
| Woori F&I Co., Ltd. |
94 | — | 5 | 89 | ||||||||||||
| Woori Securities Co., Ltd. |
355 | — | 118 | 237 | ||||||||||||
| (Won) | 391,605 | (Won) | (22,582 | ) | (Won) | 37,912 | (Won) | 331,111 | ||||||||
- 8 -
| (4) | The details of the elimination of unrealized intercompany income or loss for the nine-month period ended September 30, 2003 are as follows (Unit: Korean won in millions): |
| Operating income |
Operating expenses |
Non-operating income |
Non-operating expenses |
Total |
|||||||||||||||
| Woori Bank |
(Won) | (3,345 | ) | (Won) | — | (Won) | 3,066 | (Won) | — | (Won) | (279 | ) | |||||||
| Kyongnam Bank |
— | — | — | (6 | ) | (6 | ) | ||||||||||||
| Woori Credit Card Co., Ltd. |
— | — | — | (2,589 | ) | (2,589 | ) | ||||||||||||
| Woori Investment Bank |
— | — | (13,947 | ) | — | (13,947 | ) | ||||||||||||
| Woori Finance Information System Co., Ltd. |
(27,361 | ) | 25,633 | — | — | (1,728 | ) | ||||||||||||
| (Won) | (30,706 | ) | (Won) | 25,633 | (Won) | (10,881 | ) | (Won) | (2,595 | ) | (Won) | (18,549 | ) | ||||||
| (5) | The Company applied the equity method of accounting based on the financial statements of the investees prepared at the same date as the Company’s balance sheet date. |
| 4. | LOANS: |
| Loans | as of September 30, 2003 and December 31, 2002 are as follows: |
| Korean won |
US dollars (Note 2) | |||||||||||||||||
| Issuance date |
Maturity date |
Interest rate (%) |
Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 | ||||||||||||
| (In millions) | (In thousands) | |||||||||||||||||
| Woori Finance Information System (*1) |
Apr. 25, 2002 |
Apr. 25, 2006 |
7.8 | (Won) | 30,000 | (Won) | 30,000 | US$ | 6,082 | US$ | 6,082 | |||||||
| ” |
Oct. 31, 2002 |
Oct. 31, 2006 |
7.3 | 150,000 | 150,000 | 130,412 | 130,412 | |||||||||||
| (Won) | 180,000 | (Won) | 180,000 | US$ | 56,494 | US 156,494 | ||||||||||||
| Woori F&I (*2) |
Sep. 27, 2002 |
Sep. 27, 2006 |
7.6 | — | 400 | — | 348 | |||||||||||
| ” |
Dec. 20, 2002 |
Dec. 20, 2006 |
7.6 | 5,000 | 34,200 | 4,347 | 29,734 | |||||||||||
| ” |
Mar. 25, 2003 |
Mar. 25, 2007 |
7.3 | 90,000 | — | 78,247 | — | |||||||||||
| Jul. 7, 2003 |
Jul. 7, 2007 |
7.3 | 23,000 | — | 19,997 | — | ||||||||||||
| Jul 29 2003 |
Jul 29 2007 |
7.3 | 8,850 | — | 7,694 | — | ||||||||||||
| 126,850 | 34,600 | 110,285 | 30,082 | |||||||||||||||
| (Won) | 306,850 | (Won) | 214,600 | US$ | 266,779 | US$ | 186,576 | |||||||||||
| WASS1: |
||||||||||||||||||
| 1-1 unguaranteed privately placed bond (*3) |
Dec. 21, 2001 |
Dec. 21, 2010 |
6.24 | (Won) | — | (Won) | 4,360 | US$ | — | US$ | 3,791 | |||||||
| 1-2 unguaranteed privately placed bond (*4) |
Dec. 21, 2001 |
Dec. 21, 2010 |
7.5 | — | 184,487 | — | 160,395 | |||||||||||
| — | 188,847 | — | 164,186 | |||||||||||||||
| WASS2: |
||||||||||||||||||
| 2-1 unguaranteed privately placed bond (*5) |
Jan. 8, 2002 |
Jan. 8, 2012 |
7.5 | 100 | 59,936 | 87 | 52,110 | |||||||||||
- 9 -
| WASS3: |
|||||||||||||||||||
| 3-1 unguaranteed privately placed bond (*5) |
Apr. 15, 2002 |
Apr. 15, 2012 |
7.8 | 28,790 | 65,205 | 25,030 | 56,689 | ||||||||||||
| Woori Bank: |
|||||||||||||||||||
| 1st unguaranteed subordinated convertible bonds (*6) |
Sep. 27, 2002 |
Sep. 27, 2012 |
— | 150,000 | 150,000 | 130,412 | 130,412 | ||||||||||||
| 2nd unguaranteed subordinated convertible bonds (*6) |
Oct. 30, 2002 |
Oct. 30, 2012 |
— | 200,000 | 200,000 | 173,883 | 173,883 | ||||||||||||
| 3rd unguaranteed subordinated convertible bonds (*6) |
Nov. 28, 2002 |
Nov. 28, 2012 |
— | 250,000 | 250,000 | 217,354 | 217,354 | ||||||||||||
| 600,000 | 600,000 | 521,649 | 521,649 | ||||||||||||||||
| Woori Credit Card: |
|||||||||||||||||||
| Unguaranteed subordinated privately placed bond (*7) |
Dec. 27, 2002 |
Dec. 27, 2008 |
6.62 | % | — | 200,000 | — | 173,883 | |||||||||||
| Kwangju Bank: |
|||||||||||||||||||
| Unguaranteed subordinated convertible bonds (*8) |
Dec. 31, 2002 |
Dec. 31, 2012 |
— | 50,000 | 50,000 | 43,471 | 43,471 | ||||||||||||
| Total |
(Won) | 985,740 | (Won) | 1,378,588 | US$ | 857,016 | US$ | 1,198,564 | |||||||||||
| Allowance for possible loan losses |
(Won) | 4,929 | (Won) | 147,381 | US$ | 4,285 | US$ | 128,135 | |||||||||||
| Net |
(Won) | 980,811 | (Won) | 1,231,207 | US$ | 852,731 | US$ | 1,070,429 | |||||||||||
| (*1) | Loans to finance the transaction among Woori Bank, WCC and WFIS, in which Woori Bank and WCC transferred their IT equipment to WFIS. |
| (*2) | Loans granted to finance the acquisitions of the securitization debentures and the investment equity securities related to the joint venture special entities of WF&I. Lump-sum redemption will be made (partial early payment could be made). |
| (*3) | Early repaid entirely as of January 30, 2003. |
| (*4) | As of September 24, 2003, (Won)57,087 million (US$ 49,632thousand) was repaid and (Won)127,400 million was written off (US$110,763 thousand). |
| (*5) | The principal of the non-guaranteed privately placed bonds listed above shall be fully repaid on the maturity date, however, the trustees may exercise early redemption rights to pay in part or in whole the principal in accordance with the business trust contract pursuant to the asset securitization plan. |
| (*6) | The coupon rate on the bonds is zero and the guaranteed return is 148.02%. The conversion price is (Won)5,000 and conversion rights are valid from one year after the issuance date to one month before the maturity date. The common shares of Woori Bank will be issued upon conversion. |
| (*7) | Early repaid entirely as of March 27, 2003. |
| (*8) | The coupon rate on the bonds is zero and guaranteed return is 155.29%. The conversion price is (Won)5,000 and conversion rights are valid from one year after the issuance date to one month before the maturity date. The common shares of Kwangju Bank will be issued upon conversion. |
- 10 -
| 5. | ALLOWANCE FOR POSSIBLE LOAN LOSSES: |
Allowance for possible loan losses as of September 30, 2003 and December 31, 2002 are as follows:
| Korean won |
US dollars (Note 2) | |||||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 | |||||||||
| (In millions) | (In thousands) | |||||||||||
| Loan: |
||||||||||||
| Woori F&I |
(Won) | 634 | (Won) | 173 | US$ | 552 | US$ | 151 | ||||
| Woori Finance Information System |
900 | 900 | 782 | 782 | ||||||||
| Woori Bank |
3,000 | 3,000 | 2,608 | 2,608 | ||||||||
| Woori Credit Card |
— | 1,000 | — | 869 | ||||||||
| Kwangju Bank |
250 | 250 | 217 | 217 | ||||||||
| Woori First Asset Securitization Specialty |
— | 131,869 | — | 114,649 | ||||||||
| Woori Second Asset Securitization Specialty |
1 | 300 | 1 | 261 | ||||||||
| Woori Third Asset Securitization Specialty |
144 | 9,889 | 125 | 8,598 | ||||||||
| Sub-total |
4,929 | 147,381 | 4,285 | 128,135 | ||||||||
| Other asset: |
||||||||||||
| Long-term accrued interest income |
117 | — | 102 | — | ||||||||
| (Won) | 5,046 | (Won) | 147,381 | US$ | 4,387 | US$ | 128,135 | |||||
| 6. | FIXED ASSETS: |
Fixed assets as of September 30, 2003 and December 31, 2002 are as follows:
| Korean Won |
US Dollars (Note 2) |
|||||||||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 |
|||||||||||||
| (In millions) | (In thousands) | |||||||||||||||
| Tangible assets |
||||||||||||||||
| Vehicles |
(Won) | 104 | (Won) | 104 | US$ | 90 | US$ | 90 | ||||||||
| Furniture and equipment |
542 | 523 | 472 | 455 | ||||||||||||
| Structures in leased offices |
121 | 121 | 105 | 105 | ||||||||||||
| 767 | 748 | 667 | 650 | |||||||||||||
| Less: Accumulated depreciation |
(530 | ) | (424 | ) | (461 | ) | (368 | ) | ||||||||
| 237 | 324 | 206 | 282 | |||||||||||||
| Intangible assets |
43 | 50 | 37 | 43 | ||||||||||||
| (Won) | 280 | (Won) | 374 | US$ | 243 | US$ | 325 | |||||||||
| 7. | OTHER ASSETS: |
Other assets as of September 30, 2003 and December 31, 2002 are as follows:
| Korean won |
US dollars (Note 2) | |||||||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 | |||||||||||
| (In millions) | (In thousands) | |||||||||||||
| Guarantee deposits |
(Won) | 3,871 | (Won) | 3,871 | US$ | 3,366 | US$ | 3,366 | ||||||
| Other receivables |
962 | 100 | 836 | 87 | ||||||||||
| Accrued income |
26,567 | 8,933 | 23,098 | 7,766 | ||||||||||
| Currency swaps (Notes 9 and 10) |
5,736 | 440 | 4,987 | 383 | ||||||||||
| Advance payment |
5 | — | 4 | — | ||||||||||
| Prepaid expenses |
1,118 | 1,887 | 972 | 1,641 | ||||||||||
| Prepaid income tax |
5,497 | 6,964 | 4,779 | 6,054 | ||||||||||
| Total |
43,756 | 22,195 | 38,042 | 19,297 | ||||||||||
| Allowance for losses for accrued interest |
(117 | ) | — | (102 | ) | — | ||||||||
| Net |
(Won) | 43,639 | (Won) | 22,195 | US$ | 37,940 | US$ | 19,297 | ||||||
- 11 -
| 8. | BORROWINGS: |
Borrowings in local currency as of September 30, 2003 and December 31, 2002 are as follows:
| Annual interest rate (%) |
Maturity |
Korean won |
US dollars (Note 2) | ||||||||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 | ||||||||||||||
| (In millions) | (In thousands) | ||||||||||||||||
| Seoul Bank |
( | *1) | Oct. 30, 2003 | (Won) | 200,000 | (Won) | 200,000 | US$ | 173,883 | US$ | 173,883 | ||||||
| KorAm Bank |
( | *1,*2) | Oct. 31, 2003 | — | 100,000 | — | 86,941 | ||||||||||
| Korea First Bank(*3) |
5.31% | Jul. 16, 2004 | 30,000 | — | 26,082 | — | |||||||||||
| Shinhan Bank (*4) |
5.21% | Aug. 19, 2005 | 70,000 | — | 60,859 | — | |||||||||||
| Samsung Insurance Company(*5) |
6.10% | Sep. 15, 2004 | 50,000 | — | 43,471 | — | |||||||||||
| (Won) | 350,000 | (Won) | 300,000 | US$ | 304,295 | US$ | 260,824 | ||||||||||
| (*1) | Interest at 3-month Negotiable Certificate of Deposit (“CD”) rate + 1% should be paid in advance. Early redemption is permitted. |
| (*2) | Early redeemed entirely as of May 30, 2003. |
| (*3) | Under the agreement of line of credit of (Won)100,000 million, unused balance is (Won) 70,000 million as of September 30, 2003. |
| (*4) | Under the agreement of line of credit of (Won)200,000 million, unused balance is (Won)130,000 million as of September 30, 2003. |
| (*5) | Under the agreement of line of credit of (Won)100,000 million, unused balance is (Won)50,000 million as of September 30, 2003. |
- 12 -
| 9. | DEBENTURES: |
| (1) | Debentures in local currency as of September 30, 2003 and December 31, 2002 are as follows: |
| 1) | Bonds |
| Issuing date |
Interest rate (%) |
Maturity | Korean won |
US dollars (Note2) |
||||||||||||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 |
|||||||||||||||||||
| (In millions) | (In thousands) | |||||||||||||||||||||
| The 2nd bonds |
Sep. 28, 2001 | 5.00 | Sep. 28, 2004 | (Won) | 300,000 | (Won) | 300,000 | US$ | 260,824 | US$ | 260,824 | |||||||||||
| The 3rd bonds |
Dec. 3, 2001 | 5.93 | Dec. 3, 2004 | 300,000 | 300,000 | 260,824 | 260,824 | |||||||||||||||
| The 4th bonds |
Dec. 17, 2001 | 6.00 | Dec. 17, 2004 | 150,000 | 150,000 | 130,413 | 130,413 | |||||||||||||||
| The 5th bonds |
Dec. 28, 2001 | 6.86 | Jun. 28, 2004 | 300,000 | 300,000 | 260,824 | 260,824 | |||||||||||||||
| The 7th bonds |
Nov. 27, 2002 | 5.80 | Nov. 27, 2005 | 300,000 | 300,000 | 260,824 | 260,824 | |||||||||||||||
| The 8th bonds |
Dec. 26, 2002 | 6.05 | Dec. 26, 2007 | 200,000 | 200,000 | 173,883 | 173,883 | |||||||||||||||
| The 9th bonds |
Sep. 19, 2003 | 4.64 | Sep. 19, 2006 | 300,000 | — | 260,824 | — | |||||||||||||||
| Total |
1,850,000 | 1,550,000 | 1,608,416 | 1,347,592 | ||||||||||||||||||
| Less: discounts |
(8,233 | ) | (12,012 | ) | (7,158 | ) | (10,444 | ) | ||||||||||||||
| (Won) | 1,841,767 | (Won) | 1,537,988 | US$ | 1,601,258 | US$ | 1,337,148 | |||||||||||||||
| 2) | Bonds with warrants |
| Issuing date |
Interest rate (%) |
Maturity | Korean won |
US dollars (Note2) |
|||||||||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 |
||||||||||||||||
| (In millions) | (In thousands) | ||||||||||||||||||
| The 1st bonds with warrants |
Jul. 16, 2001 | 5.00 | Jul. 16, 2003 | — | (Won) | 66,680 | US$ | — | US$ | 57,972 | |||||||||
| Less: discounts |
— | (220 | ) | — | (191 | ) | |||||||||||||
| — | (Won) | 66,460 | US$ | — | US$ | 57,781 | |||||||||||||
| 3) | Convertible bonds |
| Issuing date |
Interest rate (%) |
Maturity | Korean won |
US dollars (Note2) | ||||||||||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 | |||||||||||||||||
| (In millions) | (In thousands) | |||||||||||||||||||
| The subordinated convertible bonds |
Mar. 26, 2003 | — | Mar. 26, 2006 | (Won) | 20,000 | (Won) | — | US$ | 17,388 | US$ | — | |||||||||
| Add: redemption premium |
2,314 | — | 2,012 | — | ||||||||||||||||
| Less: reconciliation for conversion rights |
(2,773 | ) | — | (2,411 | ) | — | ||||||||||||||
| (Won) | 19,541 | (Won) | — | US$ | 16,989 | US$ | — | |||||||||||||
This unguaranteed subordinated privately placed convertible bonds were issued to Lehman Brothers International Europe (“LBIE”). The coupon rate is zero whereas yield to maturity of 3.683 % was guaranteed if the bonds would not be converted. The conversion price is (Won) 5,380 (US$ 4.68) per share which might be adjusted due to additional stock issuances, stock dividends, and split or reverse split of shares. The number of the shares to be issued upon conversion is 3,717,472. The conversion rights are valid from one year after the issuance date to one month before the maturity date. The Company is obligated to issue new common shares upon the requests of the bondholders while the purchaser is obligated to hold the bonds or converted shares, if converted, until September 26, 2004.
- 13 -
| (2) | Debentures in foreign currencies as of September 30, 2003 and December 31, 2002 are as follows (Unit: Korean won in millions, US dollars in thousands, and Japanese yen in thousands): |
1) Bonds in foreign currency
| Foreign currency |
||||||||||||||||
| Issuing Date |
Annual interest rate (%) |
Maturity |
Sep. 30, 2003 |
Dec. 31, 2002 |
||||||||||||
| (In thousands) | ||||||||||||||||
| Floating rate notes |
Nov. 2, 2001 | ( | *1) | Nov. 2, 2004 | US$ | 150,000 | US$ | 150,000 | ||||||||
| Less: Discount |
(263 | ) | (438 | ) | ||||||||||||
| US$ | 149,737 | US$ | 149,562 | |||||||||||||
| Translation into Korean won |
(Won) | 172,227 | (Won) | 179,534 | ||||||||||||
| Yen denominated bonds |
Jan. 16, 2002 | 1.74 | Jan. 16, 2004 | JPY | 15,000,000 | JPY | 15,000,000 | |||||||||
| Less: Discount |
(11,144 | ) | (39,604 | ) | ||||||||||||
| JPY | 14,988,856 | JPY | 14,960,396 | |||||||||||||
| Translation into Korean won |
(Won) | 154,226 | (Won) | 151,530 | ||||||||||||
| Total |
(Won) | 326,453 | (Won) | 331,064 | ||||||||||||
| (*1) | London Inter Bank Offered Rate (LIBOR) (6 months) + 1.6% |
| 2) | Convertible bonds in foreign currency |
| Foreign currency | |||||||||||||
| Issuing date |
Annual interest rate (%) |
Maturity |
Sep. 30, 2003 |
Dec. 31, 2002 | |||||||||
| (In thousands) | |||||||||||||
| Convertible bonds (*1) |
Sep. 27, 2002 | — | Sep. 27, 2005 | US$ | 36,000 | US$ | 36,000 | ||||||
| Long-term accrued interest |
1,069 | 276 | |||||||||||
| US$ | 37,069 | US$ | 36,276 | ||||||||||
| Translation into Korean won |
(Won) | 42,692 | (Won) | 44,474 | |||||||||
| Convertible bonds (*2) |
Dec. 12, 2002 | Dec. 12, 2005 | US$ | 16,000 | US$ | 16,000 | |||||||
| Long-term accrued interest |
343 | 13 | |||||||||||
| US$ | 16,343 | US$ | 16,013 | ||||||||||
| Translation into Korean won |
(Won) | 18,819 | (Won) | 19,264 | |||||||||
| Convertible bonds (*3) |
Mar. 26, 2003 | — | Mar. 26, 2006 | US$ | 39,000 | US$ | — | ||||||
| Add: redemption premium |
2,664 | — | |||||||||||
| Less: reconciliation for conversion rights |
(3,772 | ) | — | ||||||||||
| US$ | 37,892 | US$ | — | ||||||||||
| Translation into Korean won |
(Won) | 43,535 | (Won) | — | |||||||||
| Convertible bonds (*4) |
Jul. 10, 2003 | Jul. 10, 2006 | US$ | 1,000 | US$ | — | |||||||
| Add: redemption premium |
63 | — | |||||||||||
| Less: reconciliation for conversion rights |
(90 | ) | — | ||||||||||
| US$ | 973 | US$ | — | ||||||||||
| (Won) | 1,117 | (Won) | — | ||||||||||
| Total |
(Won) | 106,163 | (Won) | 63,738 | |||||||||
- 14 -
| (*1) | The unguaranteed subordinated privately placed bonds of US$36 million were issued to LBIE on September 27, 2002. The coupon rate on the bonds is zero whereas yield to maturity of 2.9245% was guaranteed if the bonds would not be converted. The conversion price is (Won) 7,313 per share (conversion-exchange rate applied was (Won)1,201.4:US$ 1), which might be adjusted due to additional stock issuances, stock dividends, and split or reverse split of shares. The number of shares available for conversion is 5,914,180 shares. The conversion rights are valid from one year after the issuance date to one month before the maturity date. The Company is obligated to issue new common shares upon the requests of the bondholders while the purchaser is obligated to hold the bonds or converted shares, if converted, until one and half year after the issuance date. |
| (*2) | The unguaranteed subordinated privately placed bonds of US$16 million were issued to LBIE on December 20, 2002. The coupon rate on the bonds is zero whereas yield to maturity of 2.7335% was guaranteed if the bonds would not be converted. The conversion price is (Won)5,588 per share (conversion-exchange rate applied was (Won)1,215.8:US$ 1), which might be adjusted due to additional stock issuances, stock dividends, and split or reverse split of shares. The number of shares available for conversion is 3,481,173 shares. The conversion rights are valid from one year after the issuance date to one month before the maturity date. The Company is obligated to issue new common shares upon the requests of the bondholders while the purchaser is obligated to hold the bonds or converted shares, if converted, until one and a half year after the issuance date. |
| (*3) | The unguaranteed subordinated privately placed bonds of US$ 39 million were issued to LBIE on March 26, 2003. The coupon rate on the bonds is zero whereas yield to maturity of 2.215% was guaranteed if the bonds would not be converted. The conversion price is (Won)5,380 per share (conversion-exchange rate applied was (Won)1,194.9:US$ 1), which might be adjusted due to additional stock issuances, stock dividends, and split or reverse split of shares. The number of shares available for conversion is 8,661,914 shares. The conversion rights are valid from one year after the issuance date to one month before the maturity date. The Company is obligated to issue new common shares upon the requests of the bondholders while the purchaser is obligated to hold the bonds or converted shares, if converted, until September 26, 2004. |
| (*4) | The unguaranteed subordinated privately placed bonds of US$ 1 million were issued to LBIE on July 10, 2003. The coupon rate on the bonds is zero whereas yield to maturity of 2.034% was guaranteed if the bonds would not be converted. The conversion price is (Won)7,228 per share (conversion-exchange rate applied was (Won)1,185.5:US$ 1), which might be adjusted due to additional stock issuances, stock dividends, and split or reverse split of shares. The number of shares available for conversion is 164,429 shares. The conversion rights are valid from one year after the issuance date to one month before the maturity date. The Company is obligated to issue new common shares upon the requests of the bondholders while the purchaser is obligated to hold the bonds or converted shares, if converted, until January 10, 2005. |
| (3) | In connection with the debentures in foreign currencies listed above, the Company has entered into cross currency swaps with Woori Bank in order to prevent any risks involved with fluctuations in exchange rates and interest rates. As of September 30, 2003 and December 31, 2002, cross currency swap contracts were as follows (Unit: Korean won in millions, U.S. dollars in thousands, and Japanese yen in thousands): |
| Contract date |
Maturity date |
Contracted amount |
Interest rates and terms of payment | |||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
|||||||||||
| Swap 1 |
Nov. 7, 2001 | Nov. 7, 2004 | US$ | 50,000 | US$ | 50,000 | Receipt: LIBOR (6 months) + 1.6% | |||||
| 64,650 | 64,650 | Payment: Annual rate of 6.90% in every 3 months | ||||||||||
| Swap 2 |
Nov. 18, 2001 | Nov. 18, 2004 | US$ | 99,496 | US$ | 99,496 | Receipt: LIBOR (6 months) + 1.6% | |||||
| 128,888 | 128,888 | Payment: CD interest rate (3 months) + 1.5% | ||||||||||
| Swap 3 |
Jan. 28, 2002 | Jan. 16, 2004 | |
JPY 14,924,633 |
|
JPY 14,924,633 |
Receipt: Annual rate of 1.74% in every 6 months | |||||
| 147,754 | 147,754 | Payment: CD interest rate (91 days) + 1.59% | ||||||||||
| Swap 4 |
Sep. 27, 2002 | Sep. 27, 2005 | US$ | 36,000 | US$ | 36,000 | Receipt: Compound interest rate of 2.9245%(6 month) | |||||
| 44,136 | 44,136 | Payment: Annual rate of 5% | ||||||||||
| Swap 5 |
Dec. 20, 2002 | Dec. 20, 2005 | US$ | 16,000 | US$ | 16,000 | Receipt: Compound interest rate of 2.7335%(6 month) | |||||
| 19,248 | 19,248 | Payment: Annual rate of 4.84% | ||||||||||
| Swap 6 |
Mar. 26, 2003 | Mar. 26, 2006 | US$ | 39,000 | — | Receipt: Compound interest rate of 2.215%(6 month) | ||||||
| 48,633 | Payment: Annual rate of 3.04% | |||||||||||
| Swap 7 |
Jul. 9, 2003 | Jul. 10, 2006 | US$ | 1,000 | — | Receipt: Compound interest rate of 2.034%(6 month) | ||||||
| 1,179 | Payment: Annual rate of 3.93% | |||||||||||
- 15 -
For the nine-month period ended September 30, 2003, gains on valuation of swaps of (Won)5,296 million (US$4,604 thousand) and losses on valuation of (Won)12,082 million (US$10,504 thousand) were recorded in connection with Swap 1, Swap 2, Swap 3, Swap 4, Swap 5 Swap 6 and Swap 7. For the nine-month period ended September 30, 2002, gains on valuation of (Won)1,338 million (US$1,163 thousand) and losses on valuation of (Won)15,113 million (US$13,139 thousand) were recorded in connection with Swap 1, Swap 2, Swap 3 and Swap 4.
| 10. | ACCRUED SEVERANCE BENEFITS: |
Employees and directors with more than one your of service are entitled to receive a lump-sum payment upon termination of their service with the Company. The amount to be paid for employees is calculated based on the average wage for 30 days for their each one-year service while the amount for the directors is based on a different regulation of the Company. The accrued severance benefits that would be payable assuming all eligible employees and directors were to resign as of September 30, 2003 amounted to (Won)1,255 million (US$1,091 thousand).
The details of changes in the accrued severance benefits for the nine-month period ended September 30, 2003 are as follows:
| Korean won |
US dollars (Note2) | |||||
| (In millions) | (In thousands) | |||||
| Beginning balance |
(Won) | 968 | US$ | 842 | ||
| Retirement benefits |
287 | 249 | ||||
| Payment for severance benefits |
— | — | ||||
| Ending balance |
(Won) | 1,255 | US$ | 1,091 | ||
The Company has purchased an employee retirement trust and made deposits in Woori Bank as of September 30, 2003. The deposits, amounting to (Won)581 million (US$505 thousand) as of September 30, 2003, are presented as a deduction from accrued severance indemnities.
| 11. | ASSETS AND LIABILITIES IN FOREIGN CURRENCIES: |
Assets and liabilities in foreign currencies of the Company as of September 30, 2003 and December 31, 2002 are summarized as follows:
| Foreign currencies |
Korean won equivalent | |||||||||||
| Dec. 31, 2002 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 | |||||||||
| (In thousands) | (In millions) | |||||||||||
| (Assets) |
||||||||||||
| Currency swaps |
JPY | 557,472 | JPY | 43,403 | (Won) | 5,736 | (Won) | 440 | ||||
| (Liabilities) |
||||||||||||
| Debentures in foreign currencies |
US$ | 149,737 | US$ | 149,562 | 172,227 | 179,534 | ||||||
| “ |
JPY | 14,988,855 | JPY | 14,960,396 | 154,226 | 151,530 | ||||||
| “ |
US$ | 36,000 | US$ | 36,000 | 41,407 | 44,136 | ||||||
- 16 -
| Foreign currencies |
Korean won equivalent | |||||||||||||||
| Dec. 31, 2002 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 | |||||||||||||
| (In thousands) | (In millions) | |||||||||||||||
| ” |
US$ | 16,000 | US$ | 16,000 | 18,403 | 19,248 | ||||||||||
| ” |
US$ | 39,000 | US$ | — | 44,858 | — | ||||||||||
| US$ | 1,000 | 1,150 | ||||||||||||||
| Long-term accrued interest payables |
US$ | 1,069 | US$ | 276 | 1,285 | 338 | ||||||||||
| ” |
US$ | 343 | US$ | 13 | 417 | 16 | ||||||||||
| Redemption premium |
US$ | 2,727 | — | 3,258 | — | |||||||||||
| Reconciliation for conversion rights |
US$ | (3,862 | ) | — | (4,614 | ) | — | |||||||||
| 432,617 | 394,802 | |||||||||||||||
| Accrued expenses |
US$ | 920 | US$ | 920 | 1,058 | 1,104 | ||||||||||
| JPY | 54,611 | JPY | 54,611 | 562 | 553 | |||||||||||
| 1,620 | 1,657 | |||||||||||||||
| Currency swaps |
US$ | 7,176 | US$ | 12,422 | (Won) | 8,254 | (Won) | 14,911 | ||||||||
| US$ | 9,884 | US$ | — | 11,368 | — | |||||||||||
| US$ | 2,797 | JPY | — | 3,216 | — | |||||||||||
| US$ | 874 | US$ | — | 1,005 | — | |||||||||||
| US$ | 2,697 | US$ | — | 3,102 | — | |||||||||||
| US$ | 42 | US$ | — | 48 | — | |||||||||||
| 26,993 | 14,911 | |||||||||||||||
| (Won) | 461,230 | (Won) | 411,370 | |||||||||||||
| 12. | OTHER LIABILITIES: |
Other liabilities as of September 30, 2003 and December 31, 2002 are as follows:
| Korean won |
US dollars (Note 2) |
|||||||||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 |
|||||||||||||
| (In millions) | (In thousands) | |||||||||||||||
| Accrued severance benefits |
(Won) | 1,255 | (Won) | 968 | US$ | 1,091 | US$ | 842 | ||||||||
| Deposits with employee retirement trust (Note 10) |
(581 | ) | (581 | ) | (505 | ) | (505 | ) | ||||||||
| Accrued expenses |
6,570 | 10,228 | 5,712 | 8,892 | ||||||||||||
| Other payables |
375 | 143 | 326 | 124 | ||||||||||||
| Withholdings |
202 | 103 | 176 | 90 | ||||||||||||
| Currency swaps (Notes 9 and 11) |
26,993 | 14,911 | 23,468 | 12,964 | ||||||||||||
| (Won) | 34,814 | (Won) | 25,772 | US$ | 30,268 | US$ | 22,407 | |||||||||
| 13. | SHAREHOLDERS’ EQUITY: |
The Company has 2,400,000,000 authorized shares of common stock with (Won)5,000 par value, of which 775,504,910 common shares [(Won)3,877,525 million (US$3,371,175 thousand)] and 767,814,797 common shares [(Won)3,839,074 million (US$3,337,745 thousand)] were issued and outstanding as of September 30, 2003 and December 31, 2002, respectively.
- 17 -
The changes in the capital stock of the Company during the period from the incorporation to September 30, 2003 are as follows (Unit: Korean won in millions):
| Date of issuance |
Description |
Number of shares issued |
Capital stock |
Paid-in capital in excess of par value |
|||||||
| March 27, 2001 |
Establishment | 727,458,609 | (Won) | 3,637,293 | (Won) | — | |||||
| June 12, 2002 |
Issue of new shares | 36,000,000 | 180,000 | 58,645 | |||||||
| In 2002 |
Exercise of warrants | 4,356,188 | 21,781 | — | |||||||
| 767,814,797 | (Won) | 3,839,074 | (Won) | 58,645 | |||||||
| In 2003 |
Exercise of warrants | 7,690,113 | 38,451 | (574 | ) | ||||||
| 775,504,910 | (Won) | 3,877,525 | (Won) | 58,071 | |||||||
Other capital surplus consists of consideration for conversion rights in the amounts of (Won)2,215 million (US$1,926 thousand), (Won)997 million (US$ 867 thousand), and (Won)41million(US$ 35.6thousand) of subordinated convertible bonds, the first two among which were issued on March 26, 2003 and the third among which was issued on July 10, 2003, respectively.
Pursuant to the Financial Holding Company Act Article 53, legal reserves are appropriated at more than one tenth of the net income but not exceeding the total capital amount, whenever dividends are declared.
| 14. | STOCK OPTIONS: |
| (1) | On December 4, 2002, the Company granted stock options to 62 directors of the Company and its subsidiaries. The exercise price of 60 percent of the total number of stock options granted will be determined depending on the Korean banking industry stock index (at minimum (Won)6,800 per share). In addition, for the remaining 40 percent of the total number of stock options granted, of which the exercise price is (Won)6,800 per share, the number of stock option to be vested will be dependent on the Company’s management performance target levels; non-performing loans ratio, capital adequacy ratio and net income to total asset ratio by 15%, 15%, and 10%, respectively. The stock options are exercisable during a three-year period beginning after three years from the grant date. If the stock options are exercised, the Company has the option either to issue new shares or shares held as treasury stock, or to pay the difference between the market price and the exercise price in cash or with treasury stock. |
The summary of stock options granted as of September 30, 2003 is summarized as follows:
| Description |
The Company |
Subsidiaries |
Total | |||
| Exercisable number of shares |
450,000 shares | 1,110,000 shares | 1,560,000 shares | |||
| Type |
Share issue or |
Share issue or |
||||
| Valuation method |
Fair value approach | Fair value approach | Fair value approach |
| (2) | The Company estimated stock option costs using the Black & Scholes pricing model and the details are summarized as follows: |
| Description |
Application | |
| Risk free rate |
Yield (5.70%) of treasury bond, which has the same residual maturity as the expected exercise period, as of December 4, 2002 | |
| Expected exercising period |
4.5 year (average holding period) | |
| Expected dividend income ratio |
0% | |
| Expected lapse ratio |
0% | |
| Expected volatility of stock price |
56.72%, that is the annualized standard deviation of expected stock investment yield based on the continuous compounded method | |
| Exercise price |
(Won)6,800 per share | |
| Fair value |
(Won)2,081 per share | |
| (3) | The summary of stock option costs over the exercisable period is summarized as follows (Unit: Korean won in millions): |
| Description |
The Company |
Subsidiaries |
Total | ||||||
| Total stock option costs |
(Won) | 936 | (Won) | 2,310 | (Won) | 3,246 | |||
| Recorded in 2002 |
39 | 96 | 135 | ||||||
| Recorded in the nine months ended 2003 |
351 | 866 | 1,217 | ||||||
| To be recorded thereafter |
546 | 1,348 | 1,894 | ||||||
As for the managements of the subsidiaries, each subsidiary is responsible for absorbing the respective stock option cost. The subsidiaries recorded the related cost as stock compensation expense and other payables, and the Company recorded the same amount as other receivables and capital adjustments.
- 18 -
| 15. | INCOME TAX EXPENSE: |
| (1) | Differences between financial accounting income and taxable income (loss) for the nine-month period ended September 30, 2003 are as follows: |
| Korean won |
US dollars (Note 2) |
|||||||
| (In millions) | (In thousands) | |||||||
| Net income |
(Won) | 370,091 | US$ | 321,762 | ||||
| Permanent differences |
||||||||
| Addition; |
||||||||
| Gain on valuation of investment securities |
384,695 | 334,459 | ||||||
| Deemed interest income |
31,549 | 27,429 | ||||||
| Reconciliation for convertible rights |
3,253 | 2,828 | ||||||
| Other |
2,118 | 1,840 | ||||||
| 421,615 | 366,556 | |||||||
| Deduction; |
||||||||
| Dividend |
495,990 | 431,220 | ||||||
| Investment securities |
9,712 | 8,444 | ||||||
| 505,702 | 439,664 | |||||||
| (84,087 | ) | (73,108 | ) | |||||
| Temporary differences: |
||||||||
| Addition; |
||||||||
| Investment securities |
1,338,480 | 1,163,693 | ||||||
| Other |
48,880 | 42,497 | ||||||
| 1,387,360 | 1,206,190 | |||||||
| Deduction; |
||||||||
| Investment securities |
1,593,845 | 1,385,711 | ||||||
| Other |
195,463 | 169,938 | ||||||
| 1,789,308 | 1,555,649 | |||||||
| (401,948 | ) | (349,459 | ) | |||||
| Taxable income (loss) |
(Won) | (115,944 | ) | US$ | (100,805 | ) | ||
| (2) | The changes in cumulative temporary differences and tax loss carryforwards for the nine-month period ended September 30, 2003 are as follows (Unit: Korean won in millions): |
| Jan. 1, 2003 (*1) |
Increase |
Decrease |
Sep 30, 2003 |
Deferred tax assets (liabilities)(*2) |
||||||||||||||||
| Investment securities |
(Won) | (1,338,480 | ) | (Won) | (1,593,845 | ) | (Won) | (1,338,480 | ) | (Won) | (1,593,845 | ) | (Won) | (28,037 | ) | |||||
| Swap contracts |
14,472 | 21,257 | 14,472 | 21,257 | 6,313 | |||||||||||||||
| Accrued income |
(5,098 | ) | (3,073 | ) | (5,098 | ) | (3,073 | ) | (913 | ) | ||||||||||
| Accrued severance benefits |
— | 172 | — | 172 | 51 | |||||||||||||||
| Depreciation |
18 | 2 | 4 | 16 | 5 | |||||||||||||||
| Accrued expenses |
2,903 | 909 | 2,903 | 909 | 270 | |||||||||||||||
| Allowance for doubtful accounts |
133,556 | 4,811 | 133,556 | 4,811 | 1,429 | |||||||||||||||
| Accounts receivable |
(96 | ) | (862 | ) | — | (958 | ) | (285 | ) | |||||||||||
| Long-term accrued interest payables |
354 | 1,347 | — | 1,701 | 505 | |||||||||||||||
| Long-term accrued interest income |
(3,835 | ) | (23,494 | ) | — | (27,329 | ) | (8,117 | ) | |||||||||||
| Amortizatioan of discounts on debentures |
— | 5,572 | — | 5,572 | 1,655 | |||||||||||||||
| Adjustment of conversion rights |
— | (7,387 | ) | — | (7,387 | ) | (2,194 | ) | ||||||||||||
| (1,196,206 | ) | (1,594,591 | ) | (1,192,643 | ) | (1,598,154 | ) | (29,318 | ) | |||||||||||
| Tax loss carryforwards |
39,793 | 115,944 | — | 155,737 | 46,254 | |||||||||||||||
| (Won) | (1,156,413 | ) | (Won) | (1,478,647 | ) | (Won) | (1,192,643 | ) | (Won) | (1,442,417 | ) | (Won) | 16,936 | |||||||
| (*1) | Reflected the additional adjustment based on the reported tax returns. |
| (*2) | The Company did not recognize deferred tax assets due to the uncertainty of its future realization. |
- 19 -
| (3) | Remaining tax loss carryforwards and their expirations are as follows (Unit: Korean won in millions): |
| Year incurred |
Amount |
Utilized |
Remaining |
Expiration | |||||||
| 2001 |
(Won) | 25,588 | (Won) | — | (Won) | 25,588 | 2006 | ||||
| 2002 |
14,205 | — | 14,205 | 2007 | |||||||
| (Won) | 39,793 | (Won) | — | (Won) | 39,793 | ||||||
| 16. | STATEMENTS OF CASHFLOWS |
For the nine months ended September 30, 2003, the transactions without cash flows are as follows (unit: Korean won in millions):
| Transactions |
Sep. 30, 2003 |
Sep. 30, 2003 | ||||
| (million) | (thousand) | |||||
| Increase in capital adjustments due to valuation of investment securities |
(Won) | 384,695 | US$ | 334,459 | ||
| Decrease in retained earnings due to valuation of investment securities |
9,712 | 8,444 | ||||
| Write-off of loans |
127,517 | 110,865 | ||||
| Increase in other receivable and stock options |
866 | 753 | ||||
| 17. | GENERAL AND ADMINISTRATIVE EXPENSES: |
General and administrative expenses for the nine-month periods ended September 30, 2003 and 2002 are summarized as follows:
| Korean won |
US dollars (Note 2) | |||||||||||
| 2003 |
2002 |
2003 |
2002 | |||||||||
| (In millions) | (In thousands) | |||||||||||
| Salaries, wages and bonuses |
(Won) | 5,166 | (Won) | 5,002 | US$ | 4,491 | US$ | 4,349 | ||||
| Provision for severance benefits |
287 | 769 | 250 | 669 | ||||||||
| Fringe benefits |
323 | 363 | 281 | 316 | ||||||||
| Rent |
1,746 | 1,777 | 1,518 | 1,545 | ||||||||
| Entertainment |
348 | 380 | 303 | 330 | ||||||||
| Depreciation |
105 | 197 | 91 | 171 | ||||||||
| Amortization on intangible assets |
10 | 8 | 9 | 7 | ||||||||
| Taxes and dues |
60 | 76 | 52 | 66 | ||||||||
| Advertising |
6,234 | 5,841 | 5,420 | 5,078 | ||||||||
| Travel |
169 | 277 | 147 | 241 | ||||||||
| Telecommunications |
50 | 55 | 43 | 48 | ||||||||
| Commissions |
1,191 | 535 | 1,035 | 465 | ||||||||
| Suppliers |
76 | 84 | 66 | 73 | ||||||||
| Stock compensation (Note 14) |
351 | — | 305 | — | ||||||||
| Other |
982 | 431 | 854 | 374 | ||||||||
| (Won) | 17,098 | (Won) | 15,795 | US$ | 14,865 | US$ | 13,732 | |||||
- 20 -
General and administrative expenses for the three-month periods ended September 30, 2003 and 2002 are summarized as follows:
| Korean won |
US dollars (Note 2) | |||||||||||
| 2003 |
2002 |
2003 |
2002 | |||||||||
| (In millions) | (In thousands) | |||||||||||
| Salaries, wages and bonuses |
(Won) | 1,805 | (Won) | 1,183 | US$ | 1,569 | US$ | 1,029 | ||||
| Provision for severance benefits |
20 | 69 | 17 | 60 | ||||||||
| Fringe benefits |
84 | 83 | 73 | 72 | ||||||||
| Rent |
576 | 592 | 501 | 515 | ||||||||
| Entertainment |
91 | 109 | 79 | 95 | ||||||||
| Depreciation |
35 | 65 | 30 | 57 | ||||||||
| Amortization on intangible assets |
3 | 3 | 3 | 3 | ||||||||
| Taxes and dues |
17 | 32 | 15 | 28 | ||||||||
| Advertising |
967 | 30 | 841 | 26 | ||||||||
| Travel |
62 | 33 | 54 | 29 | ||||||||
| Telecommunications |
13 | 18 | 11 | 16 | ||||||||
| Commissions |
621 | 212 | 540 | 184 | ||||||||
| Suppliers |
27 | 24 | 23 | 21 | ||||||||
| Stock compensation (Note 14) |
117 | — | 102 | — | ||||||||
| Other |
311 | 194 | 271 | 166 | ||||||||
| (Won) | 4,749 | (Won) | 2,647 | US$ | 4,129 | US$ | 2,301 | |||||
| 18. | FINANCIAL INFORMATION OF SUBSIDIARIES: |
| (1) | The condensed balance sheets of subsidiaries prepared as of September 30, 2003 are as follows (Unit: Korean won in millions): |
| Company |
Total assets |
Total liabilities |
Total stockholders’ equity (capital deficiency) |
|||||||
| Woori Bank |
(Won) | 97,936,335 | (Won) | 92,427,254 | (Won) | 5,509,081 | ||||
| Kyongnam Bank |
11,140,921 | 10,642,039 | 498,882 | |||||||
| Kwangju Bank |
9,003,099 | 8,644,503 | 358,596 | |||||||
| Woori Credit Card |
3,668,864 | 3,431,235 | 237,629 | |||||||
| Woori Finance Information System |
264,395 | 256,221 | 8,174 | |||||||
| Woori F&I |
168,724 | 134,340 | 34,384 | |||||||
| Woori First Asset Securitization Specialty |
430 | 395 | 35 | |||||||
| Woori Second Asset Securitization Specialty |
33,733 | 47,318 | (13,585 | ) | ||||||
| Woori Third Asset Securitization Specialty |
36,585 | 89,139 | (52,554 | ) | ||||||
| Woori Investment Trust Management |
35,253 | 375 | 34,878 | |||||||
| Woori Securities |
849,617 | 488,622 | 360,995 | |||||||
| (Won) | 123,137,956 | (Won) | 116,161,441 | (Won) | 6,976,515 | |||||
-21-
| (2) | The condensed statements of operations of subsidiaries prepared for the nine-month period ended September 30, 2003 are as follows (Unit: Korean won in millions): |
| Company |
Operating revenue |
Operating expense |
Net operating profit (loss) |
Ordinary income (loss) |
Net income (loss) |
|||||||||||||
| Woori Bank |
(Won) | 5,824,425 | (Won) | 4,838,243 | (Won) | 986,182 | (Won) | 1,280,562 | (Won) | 1,159,137 | ||||||||
| Kyongnam Bank |
566,942 | 506,907 | 60,035 | 53,296 | 83,742 | |||||||||||||
| Kwangju Bank |
441,015 | 408,241 | 32,774 | 36,748 | 64,404 | |||||||||||||
| Woori Credit Card |
765,314 | 1,562,773 | (797,459 | ) | (768,821 | ) | (889,781 | ) | ||||||||||
| Woori Investment Bank(*1) |
140,514 | 138,037 | 2,477 | 21,561 | 21,561 | |||||||||||||
| Woori Finance Information System |
200,641 | 194,285 | 6,356 | 7,445 | 5,413 | |||||||||||||
| Woori F&I |
17,460 | 11,774 | 5,686 | 17,966 | 10,876 | |||||||||||||
| Woori First Asset Securitization Specialty |
14,766 | 10,256 | 4,510 | 4,505 | 131,905 | |||||||||||||
| Woori Second Asset Securitization Specialty |
11,975 | 11,204 | 771 | (83 | ) | (83 | ) | |||||||||||
| Woori Third Asset Securitization Specialty |
4,557 | 5,983 | (1,426 | ) | (1,888 | ) | (1,888 | ) | ||||||||||
| Woori Investment Trust Management |
5,568 | 3,828 | 1,740 | 1,801 | 1,231 | |||||||||||||
| Woori Securities |
123,193 | 119,943 | 3,250 | (13,748 | ) | (11,348 | ) | |||||||||||
| (Won) | 8,116,370 | (Won) | 7,811,474 | (Won) | 304,896 | (Won) | 639,344 | 575,169 | ||||||||||
| (*1) | The condensed statement of operations of WIB was prepared for the seven months ended July 31, 2003 prior to the merger into Woori Bank. |
| (3) | Major debt and assets of the Company and its subsidiaries as of September 30, 2003 are summarized as follows (Unit: Korean won in millions): |
| 1) | Major debt |
| Company |
Deposits |
Borrowings |
Debentures |
Total | ||||||||
| Woori Finance Holdings |
(Won) | — | (Won) | 350,000 | (Won) | 2,293,926 | (Won) | 2,643,926 | ||||
| Woori Bank |
69,605,114 | 9,203,712 | 6,704,616 | 85,513,442 | ||||||||
| Kyongnam Bank |
8,419,236 | 1,531,963 | 310,164 | 10,261,363 | ||||||||
| Kwangju Bank |
6,487,449 | 1,447,202 | 200,538 | 8,135,189 | ||||||||
| Woori Credit Card |
— | 740,112 | 2,505,230 | 3,245,342 | ||||||||
| Woori Finance Information System |
— | 180,000 | — | 180,000 | ||||||||
| Woori F&I |
— | 126,850 | — | 126,850 | ||||||||
| Woori Second Asset Securitization Specialty |
— | — | 100 | 100 | ||||||||
| Woori Third Asset Securitization Specialty |
— | — | 28,790 | 28,790 | ||||||||
| Woori Investment Trust Management |
48 | — | — | 48 | ||||||||
| Woori Securities |
139,212 | 110,860 | — | 250,072 | ||||||||
| (Won) | 84,651,059 | (Won) | 13,690,699 | (Won) | 12,043,364 | (Won) | 110,385,122 | |||||
-22-
| 2) | Major assets |
| Company |
Cash and due from banks |
Securities |
Loans |
Total | ||||||||
| Woori Finance Holdings |
(Won) | 290,814 | (Won) | 7,157,484 | (Won) | 980,811 | (Won) | 8,429,109 | ||||
| Woori Bank |
4,048,219 | 18,834,323 | 69,025,920 | 91,908,462 | ||||||||
| Kyongnam Bank |
944,816 | 3,217,992 | 6,422,702 | 10,585,510 | ||||||||
| Kwangju Bank |
313,800 | 2,765,194 | 5,322,355 | 8,401,349 | ||||||||
| Woori Credit Card. |
867,045 | 673,197 | 2,002,189 | 3,542,431 | ||||||||
| Woori Finance Information System |
5,730 | 89 | — | 5,819 | ||||||||
| Woori F&I |
14,895 | 146,743 | — | 161,638 | ||||||||
| Woori First Asset Securitization Specialty |
430 | — | — | 430 | ||||||||
| Woori Second Asset Securitization Specialty |
3,212 | 20,244 | 9,954 | 33,410 | ||||||||
| Woori Third Asset Securitization Specialty |
4,905 | 31,245 | 426 | 36,576 | ||||||||
| Woori Investment Trust Management |
24,692 | 339 | 1,800 | 26,831 | ||||||||
| Woori Securities |
228,228 | 415,333 | 37,231 | 680,792 | ||||||||
| (Won) | 6,746,786 | (Won) | 33,262,183 | (Won) | 83,803,388 | (Won) | 123,812,357 | |||||
| (4) | Allowances for possible loan losses of subsidiaries as of September 30, 2003 are summarized as follows (Unit: Korean won in millions): |
| Company |
Loans subject to allowance for possible loan losses |
Allowance |
% of allowance to loans | |||||
| Woori Bank |
(Won) | 70,539,604 | (Won) | 1,513,684 | 2.15 | |||
| Kyongnam Bank |
6,533,766 | 111,064 | 1.70 | |||||
| Kwangju Bank |
5,405,925 | 83,570 | 1.55 | |||||
| Woori Credit Card |
2,561,338 | 559,149 | 21.83 | |||||
| Woori Second Asset Securitization Specialty |
18,515 | 8,561 | 46.24 | |||||
| Woori Third Asset Securitization Specialty |
445 | 19 | 4.27 | |||||
| Woori Investment Trust Management |
1,800 | — | — | |||||
| Woori Securities |
58,341 | 21,110 | 36.18 | |||||
| Total |
(Won) | 85,119,734 | (Won) | 2,297,157 | 2.70 | |||
| 19. | CONTRIBUTIONS TO NET INCOME BY SUBSIDIARIES: |
Contributions to net income of the Company by subsidiaries after elimination of intercompany transactions for the nine months ended September 30, 2003 are as follows:
| Company |
Korean won |
US dollars (Note 2) |
Ratio (%) |
||||||||
| (In millions) | (In thousands) | ||||||||||
| Woori Bank |
(Won) | 1,147,436 | US$ | 997,597 | 273.0 | ||||||
| Kyongnam Bank |
83,403 | 72,512 | 19.8 | ||||||||
| Kwangju Bank |
63,678 | 55,363 | 15.1 | ||||||||
| Woori Credit Card |
(893,447 | ) | (776,775 | ) | (212.5 | ) | |||||
| Woori Investment Bank |
7,390 | 6,425 | 1.7 | ||||||||
| Woori Finance Information System |
3,712 | 3,227 | 0.9 | ||||||||
| Woori F&I |
10,873 | 9,453 | 2.6 | ||||||||
| Woori Second Asset Securitization Specialty |
1,594 | 1,386 | 0.4 | ||||||||
| Woori Third Asset Securitization Specialty |
(1,888 | ) | (1,642 | ) | (0.4 | ) | |||||
| Woori Investment Trust Management |
1,231 | 1,070 | 0.3 | ||||||||
| Woori Securities |
(3,611 | ) | (3,140 | ) | (0.9 | ) | |||||
| Gain on valuation using the equity method |
420,371 | 365,476 | 100.0 | ||||||||
| Other income |
89,600 | 77,900 | |||||||||
| Other expenses |
(139,880 | ) | (121,614 | ) | |||||||
| Net income |
(Won) | 370,091 | US$ | 321,762 | |||||||
- 23 -
| 20. | TRANSACTIONS WITH RELATED PARTIES: |
| (1) | Balances for transactions with the subsidiaries as of September 30, 2003 and December 31, 2002 are as follows: |
| Korean won |
US dollars (Note2) |
Account | ||||||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 |
|||||||||||
| (In millions) | (In thousands) | |||||||||||||
| Woori Bank |
(Won) | 263,563 | (Won) | 51,757 | US$ | 229,145 | US$ | 44,998 | Cash and bank deposits | |||||
| ” |
600,000 | 600,000 | 521,648 | 521,648 | Loans | |||||||||
| ” |
3,846 | 3,846 | 3,344 | 3,344 | Guarantee deposits | |||||||||
| ” |
433 | 43 | 376 | 37 | Other receivables | |||||||||
| ” |
22,148 | 3,905 | 19,256 | 3,395 | Accrued income | |||||||||
| ” |
5,736 | 440 | 4,987 | 383 | Currency swaps (assets) | |||||||||
| ” |
26,993 | 14,911 | 23,468 | 12,964 | Currency swaps (liabilities) | |||||||||
| Kyongnam Bank |
16,092 | 10,595 | 13,991 | 9,211 | Cash and bank deposits | |||||||||
| ” |
15 | 12 | 13 | 10 | Accrued income | |||||||||
| Kwangju Bank |
11,158 | 10,898 | 9,701 | 9,475 | Cash and bank deposits | |||||||||
| ” |
50,000 | 50,000 | 43,471 | 43,471 | Loans | |||||||||
| ” |
1,691 | 9 | 1,470 | 8 | Accrued income | |||||||||
| Woori Credit Card |
— | 200,000 | — | 173,883 | Loans | |||||||||
| ” |
— | 12 | — | 10 | Other receivables | |||||||||
| ” |
— | 147 | — | 128 | Accrued income | |||||||||
| ” |
43 | 92 | 37 | 80 | Other payables | |||||||||
| Woori Investment Bank |
— | 7 | — | 6 | Other receivables | |||||||||
| Woori Finance Information System |
180,000 | 180,000 | 156,495 | 156,495 | Loans | |||||||||
| ” |
117 | 12 | 102 | 10 | Other receivables | |||||||||
| ” |
2,235 | 2,235 | 1,943 | 1,943 | Accrued income | |||||||||
| ” |
27 | — | 23 | — | Other payables | |||||||||
| ” |
69 | — | 60 | — | Accrued expenses | |||||||||
| Woori F&I |
126,850 | 34,600 | 110,285 | 30,082 | Loans | |||||||||
| ” |
— | 78 | — | 68 | Accrued income | |||||||||
| Woori First Asset Securitization Specialty |
— | 188,847 | — | 164,186 | Loans | |||||||||
| ” |
— | 431 | — | 375 | Accrued income | |||||||||
| Woori Second Asset Securitization Specialty |
100 | 59,936 | 87 | 52,109 | Loans | |||||||||
| ” |
2 | 1,038 | 2 | 902 | Accrued income | |||||||||
- 24 -
| Korean won |
US dollars (Note2) |
Account | ||||||||
| Sep. 30, 2003 |
Dec. 31, 2002 |
Sep. 30, 2003 |
Dec. 31, 2002 |
|||||||
| (In millions) | (In thousands) | |||||||||
| Woori Third Asset Securitization Specialty |
28,790 | 65,204 | 25,030 | 56,689 | Loans | |||||
| ” |
476 | 1,078 | 414 | 937 | Accrued income | |||||
| Woori Investment Trust Management |
56 | 6 | 49 | 5 | Other receivables | |||||
| Woori Credit Information |
69 | 7 | 60 | 6 | Other receivables | |||||
| Woori CA Asset Management |
95 | — | 83 | — | Other receivables | |||||
| Principal guaranteed trust accounts of Woori Bank |
581 | 581 | 505 | 505 | Deposits with employee retirement trust | |||||
| (2) | Transactions with the subsidiaries for the nine-month periods ended September 30, 2003 and 2002 are as follows: |
| Korean won |
US dollars (Note2) |
||||||||||||
| 2003 |
2002 |
2003 |
2002 |
Account | |||||||||
| (In millions) | (In thousands) | ||||||||||||
| Woori Bank |
(Won) | 3,102 | 1,110 | US$ | 2,697 | US$ | 965 | Interest income | |||||
| ” |
17,976 | 64 | 15,629 | 56 | Interest income | ||||||||
| ” |
5,296 | 1,338 | 4,604 | 1,163 | Gain on valuation of swap contracts | ||||||||
| ” |
1,488 | 15,113 | 1,294 | 13,139 | Loss on valuation of swap contracts | ||||||||
| ” |
12,082 | 1,637 | 10,504 | 1,423 | Rent | ||||||||
| ” |
— | 415 | — | 361 | Interest expense | ||||||||
| Kyongnam Bank |
377 | 391 | 328 | 340 | Interest income | ||||||||
| Kwangju Bank |
305 | 468 | 265 | 407 | Interest income | ||||||||
| ” |
1,683 | — | 1,463 | — | Interest income | ||||||||
| Woori Credit Card |
3,163 | — | 2,750 | — | Interest income | ||||||||
| Woori Finance Information System |
9,968 | 1,005 | 8,666 | 874 | Interest income | ||||||||
| ” |
— | 239 | — | 208 | Miscellaneous income | ||||||||
| ” |
259 | 29 | 225 | 25 | Other administrative expenses | ||||||||
| Woori F&I |
5,408 | 14 | 4,702 | 12 | Interest income | ||||||||
| Woori First Asset Securitization Specialty |
9,190 | 24,518 | 7,990 | 21,316 | Interest income | ||||||||
| Woori Second Asset Securitization Specialty |
1,120 | 7,165 | 974 | 6,229 | Interest income | ||||||||
| Woori Third Asset Securitization Specialty |
1,992 | 4,463 | 1,732 | 3,880 | Interest income | ||||||||
| (3) | Transfer of credit card subscriber base |
Pursuant to a transfer agreement between Kwangju Bank and WCC dated December 23, 2002, Kwangju Bank sold its credit card subscriber base to WCC for (Won)27 billion (US$23 million) on February 28, 2003.
- 25 -
| 21. | EARNINGS PER COMMON SHARES: |
| (1) | Basic ordinary income (loss) per common share and basic net income (loss) per common share for the three-month and nine-month periods ended September 30, 2003 and 2002 are as follows: |
| Korean won | |||||||||||||
| 2003 |
2002 | ||||||||||||
| Three-month |
Nine-month |
Three-month |
Nine-month | ||||||||||
| (In millions, except for income per share) | |||||||||||||
| Net income (loss) on common shares |
(Won) | (137,411 | ) | (Won) | 370,091 | (Won) | 70,486 | (Won) | 217,478 | ||||
| Extraordinary gain (loss) |
— | — | — | — | |||||||||
| Income tax effect on extraordinary gain (loss) |
— | — | — | — | |||||||||
| Ordinary income (loss) on common shares |
(Won) | (137,411 | ) | (Won) | 370,091 | (Won) | 70,486 | (Won) | 217,478 | ||||
| Weighted average number of common shares outstanding |
775,504,910 | 770,449,840 | 766,583,466 | 743,173,050 | |||||||||
| Basic ordinary income (loss) per common shares |
(Won) | (177 | ) | (Won) | 480 | (Won) | 92 | (Won) | 293 | ||||
| Basic net income (loss) per common shares |
(Won) | (177 | ) | (Won) | 480 | (Won) | 92 | (Won) | 293 | ||||
| US dollars (Note 2) | |||||||||||||
| 2003 |
2002 | ||||||||||||
| Three-month |
Nine-month |
Three-month |
Nine-month | ||||||||||
| (In thousands, except for income per share) | |||||||||||||
| Net income (loss) on common shares |
US$ | (119,467 | ) | US$ | 321,762 | US$ | 61,282 | US$ | 189,078 | ||||
| Extraordinary gain (loss) |
— | — | — | — | |||||||||
| Income tax effect on extraordinary gain (loss) |
— | — | — | — | |||||||||
| Ordinary income (loss) on common shares |
US$ | (119,467 | ) | US$ | 321,762 | US$ | 61,282 | US$ | 189,078 | ||||
| Weighted average number of common shares outstanding |
775,504,910 | 770,449,840 | 766,583,466 | 743,173,050 | |||||||||
| Basic ordinary income (loss) per common shares |
US$ | (0.154 | ) | US$ | 0.417 | US$ | 0.080 | US$ | 0.255 | ||||
| Basic net income (loss) per common shares |
US$ | (0.154 | ) | US$ | 0.417 | US$ | 0.080 | US$ | 0.255 | ||||
| (2) Diluted ordinary income (loss) per common share and diluted net income (loss) per common share are for the three-month and nine-month periods ended September 30, 2003 and 2002 are as follows:
| |||||||||||||
| Korean won | |||||||||||||
| 2003 |
2002 | ||||||||||||
| Three-month |
Nine-month |
Three-month |
Nine-month | ||||||||||
| (In millions, except for income per share) | |||||||||||||
| Diluted net income (loss) on common shares |
(Won) | (137,411 | ) | (Won) | 372,296 | (Won) | 70,493 | (Won) | 217,708 | ||||
| Extraordinary gain (loss) |
— | — | — | — | |||||||||
| Income tax effect on extraordinary gain (loss) |
— | — | — | — | |||||||||
| Diluted ordinary income (loss) on common shares |
(Won) | (137,411 | ) | (Won) | 372,296 | (Won) | 70,493 | (Won) | 217,708 | ||||
| Weighted average number of common and dilutive common shares outstanding |
775,504,910 | 795,662,969 | 768,796,965 | 745,019,617 | |||||||||
| Diluted ordinary income (loss) per common shares |
(Won) | (177 | ) | (Won) | 468 | (Won) | 91 | (Won) | 292 | ||||
| Diluted net income (loss) per common shares |
(Won) | (177 | ) | (Won) | 468 | (Won) | 91 | (Won) | 292 | ||||
- 26 -
| US dollars (Note 2) | |||||||||||||
| 2003 |
2002 | ||||||||||||
| Three-month |
Nine-month |
Three-month |
Nine-month | ||||||||||
| (In thousands, except for income per share) | |||||||||||||
| Diluted net income (loss) on common shares |
US$ | (119,467 | ) | US$ | 323,679 | US$ | 61,288 | US$ | 189,278 | ||||
| Extraordinary gain (loss) |
— | — | — | — | |||||||||
| Income tax effect on extraordinary gain (loss) |
— | — | — | — | |||||||||
| Diluted ordinary income (loss) on common shares |
US$ | (119,467 | ) | US$ | 323,679 | US$ | 61,288 | US$ | 189,278 | ||||
| Weighted average number of common and dilutive common shares outstanding |
775,504,910 | 795,662,969 | 768,796,965 | 745,019,617 | |||||||||
| Diluted ordinary income (loss) per common shares |
US$ | (0.154 | ) | US$ | 0.407 | US$ | 0.079 | US$ | 0.254 | ||||
| Diluted net income (loss) per common shares |
US$ | (0.154 | ) | US$ | 0.407 | US$ | 0.079 | US$ | 0.254 | ||||
| (3) | The basic net income per share for the three-month periods ended March 31, 2003 and June 30, 2003 were (Won)273 (US$ 0.237) and (Won)411 (US$ 0.357), respectively, and for the year ended December 31, 2002 was (Won)786 (US$0.683). The basic ordinary income per share for such periods were the same as the basic net income per share. |
| (4) | All common stock equivalents as of September 30, 2003 are as follows: |
| Item |
Face value (In millions) |
Exercise period |
Common stock to be issued (shares) |
Remarks | |||||
| Convertible bonds |
US$ | 36 | Oct. 28, 2002 ~ Aug 27, 2005 | 5,914,180 | Using exchange rate of (Won)1,201.4 convert 1 share at (Won)7,313 | ||||
| Convertible bonds |
US$ | 16 | Jan. 21, 2003 ~ Nov. 20, 2005 | 3,481,173 | Using exchange rate of (Won)1,215.8 convert 1 share at (Won)5,588 | ||||
| Convertible bonds |
(Won) | 20,000 | Mar. 27, 2004 ~ Feb. 26, 2006 | 3,717,472 | Convert 1share at (Won)5,380 | ||||
| Convertible bonds |
US$ | 39 | Mar. 27, 2004 ~ Feb. 26, 2006 | 8,661,914 | Using exchange rate of (Won)1,194.9 concert 1 shares at (Won)5,380 | ||||
| Convertible bonds |
US$ | 1 | Jul. 10, 2004 ~ Jun. 10, 2006 | 164,429 | Using exchange rate of (Won)1,185.5 concert 1 shares at (Won)7,228 | ||||
| Stock options |
— | Dec. 5, 2005 ~ Dec. 4, 2008 | 1,560,000 | (Note 14) | |||||
| 22. | CREDITS TO SK NETWORKS CO., LTD.: |
Woori Bank, a subsidiary of the Company, has loans receivable from and payment guarantees for SK Networks Co., Ltd.(formerly known as SK Global) and its overseas subsidiaries (collectively referred to as “SK Global”) in the total amount of (Won)301 billion (US$262 million). In connection, Woori Bank provided (Won)180 billion (US$156 million) as allowances for credit losses as of September 30, 2003. However, SK Networks is currently undergoing a corporate restructuring and depending on the result of this restructuring, Woori Bank’s actual losses on SK Networks credit may differ materially.
- 27 -
| 23. | WOORI AMERICA BANK’S MERGER WITH PANASIA BANK N.A. |
On September 11, 2003, Woori America Bank, an overseas 2nd -tier subsidiary of the Company, merged with Panasia Bank N.A. pursuant to an agreement with National Penn Bancshares dated February 10, 2003, which had owned 100% stock of Panasia Bank N.A. The merger consideration was US$ 34,500 thousand and in connection with the merger, Woori Bank, a subsidiary of the Company, increased its capital holding in Woori America Bank by US$ 15,000 thousand on September 3, 2003.
| 24. | WOORI BANK’S MERGER WITH WOORI INVESTMENT BANK: |
Woori Bank merged with Woori Investment Bank, a subsidiary of the Company, on July 31, 2003 pursuant to a merger agreement dated June 25, 2003. As a result, Woori Bank took over substantially all of the assets and liabilities of Woori Investment Bank by exchanging one common share of Woori Investment Bank for 0.0355 share of Woori Bank. Woori Bank increased its capital surplus by (Won)88,439 million (US$ 76,890 thousand) which was the difference between merger consideration of (Won)138,682 million (US$ 120,572 thousand) and net assets acquired of (Won)227,121 million (US$ 197,462 thousand). Accordingly, the number of issued common shares of Woori Bank increased from 553 million to 571 million and contributed capital of Woori Bank increased from (Won)2,764.4 billion (US$2,403 million) to (Won)2,852.8 billion (US$2,480 million).
-28 -
| 25. | LITIGATION |
As of September 30, 2003, the Company is a defendant in a lawsuit claiming damages amounting to (Won)17 billion (US$15 million). However, the Company does not anticipate that the outcome of this lawsuit would have a significant effect on its financial condition.
| 26. | ECONOMIC UNCERTAINTIES: |
In response to general unstable economic conditions, the Korean government and the private sector have been implementing structural reforms to historical business practices. Implementation of these reforms is progressing slowly, particularly in the areas of restructuring private enterprises and reforming the banking industry. The Korean government continues to apply pressure to Korean companies to restructure into more efficient and profitable firms. The Company may be either directly or indirectly affected by these general unstable economic conditions and the reform program described above. The accompanying non-consolidated financial statements reflect management’s assessment of the impact to date of the economic situation on the financial position of the Company. Actual results may differ materially from management’s current assessment.
-29 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Woori Finance Holdings Co., Ltd. (Registrant) | ||||||||
| Date: November 18, 2003 | By: | /s/ WON GIHL SOHN | ||||||
| (Signature) | ||||||||
| Name: | Won Gihl Sohn | |||||||
| Title: | Managing Director | |||||||